facility administration manual - asian development bank€¦ · project numbers: loans...

MFF Number: 0031 Project Numbers: Loans 2552/2553(SF)/8246(AFD) (Tranche 1) June 2014

Pakistan: Energy Efficiency Investment Program

Facility Administration Manual

CONTENTS Page

Main Text ................................................................................................................................... 2

A. Introduction ......................................................................................................................... 2 B. Purpose of the FAM ............................................................................................................ 2 C. Key Persons Involved ......................................................................................................... 2 D. Processing History (MFF and Tranche 1) ........................................................................... 3

Annex 1: MFF and Project Description .................................................................................... 4 A. MFF ............................................................................................................................... 4 B. Tranche 1 ............................................................................................................................ 6

Annex 2: MFF Program and Project Management .................................................................. 8 A. Sponsors, Stakeholders and External Agencies ................................................................. 8 B. Organization Structures .................................................................................................... 10 C. Roles and Responsibilities ................................................................................................ 13

Annex 3: Procurement Plan ................................................................................................... 15 A. Advance Contracting and Retroactive Financing .............................................................. 15 B. Procurement Plans............................................................................................................ 15 C. National Competitive Bidding ............................................................................................ 15

Annex 4: Safeguards Plan ...................................................................................................... 20 A. MFF ............................................................................................................................. 20 B. Tranche 1 .......................................................................................................................... 21

Annex 5: Financing Plan ........................................................................................................ 22 A. MFF ............................................................................................................................. 22 B. Tranche 1 .......................................................................................................................... 23

Annex 6: Investment (Cost) Plan ........................................................................................... 25 A. Detailed Cost Estimate ($'000) ......................................................................................... 25 B. Forecast of Cost to Complete ........................................................................................... 26

Annex 7: Execution Plan ........................................................................................................ 28

Annex 8: Performance Monitoring and Evaluation ............................................................... 29 A. Deliverables and Performance Indicators ......................................................................... 29 B. Progress Reports .............................................................................................................. 29

Annex 9: Major Covenants ..................................................................................................... 31 A. MFF ............................................................................................................................. 31 B. Tranche 1 (Loan 2552/2553) ............................................................................................ 33

Annex 10: References and Formats ...................................................................................... 36 A. References ........................................................................................................................ 36 B. Format of Environmental Monitoring Report ..................................................................... 37 C. Format of Quarterly Progress Report................................................................................ 38 D. Suggested Format of Project Completion Report ............................................................. 42

Annex 11: Record of Major FAM Changes ............................................................................ 44

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Main Text )

A. Introduction

1. The Government of Pakistan (Government) entered into a Framework Financing Agreement (FFA) with the Asian Development Bank (ADB) for up to $780 million to finance the Energy Efficiency Investment Program on 13 August 2009. ADB's Board of Directors approved a multitranche financing facility (MFF 0031) to finance the Investment Program on 17 September 2009, and the President approved Tranche 1 on 22 September 2009.1 2. Tranche 1 includes loans of (i) $40 million from ADB's ordinary capital resources (Loan 2552), and €20 million ($25 million equivalent) from Agence Française de Développment (AFD, Loan 8246) for the National Compact Flourescent Lamp (CFL) Project; and (ii) $20 million from ADB's Special Funds (Loan 2553) for the Investment Program Management Support Project. The Government will contribute $20 million and $5 million to each project, respectively. B. Purpose of the FAM

3. Following the FFA between the Government and ADB, this multitranche financing facility administration memorandum (FAM) was developed to help the executing and implementing agencies and ADB monitor MFF implementation, including the individual tranches, and evaluate its performance. 4. Procurement, safeguards, and financing plans are summarized in the Annexes. References to the relevant ADB policies and procedures and FFA and tranche covenants are in Annex 10 Appendix A. The FAM is an active document, progressively updated and revised as necessary, particularly following any changes in project or program costs, scope, or implementation arrangements. This document may not reflect the latest project or program changes. C. Key Persons Involved

MFF Tranche 1

1. Executing Agency

Minister, MOWP

Minister, MOWP

2. Implementing Agencies

National CFL Project (Loan 2552/8246): CEO, KESC CEOs, DISCOs Investment Management Support Project (Loan 2553): Minister, MOWP

1 ADB. 2009. Report and Recommendation of the President to the Board of Directors: Proposed Multitranche

Financing Facility to the Islamic Republic of Pakistan and Administration of Cofinancing for the Energy Efficiency Investment Program. Manila. An additional €150,000 in loans from the Agence Française de Développment is being administered by ADB (para 2).

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MFF Tranche 1

3. ADB

K. Gerhaeusser, Director General, CWRD R. Stroem, Director, CWEN W. Liepach, Country Director, PRM

F. Cleo Kawawaki, Principal Energy Specialist, CWEN (Investment Management Support Project)

J. Hwang, Senior Project Management Specialist, CWEN (National CFL Project)

MOWP = Ministry of Water and Power; PEPCO = Pakistan Electric Power Company; KESC = Karachi Electric Supply Corporation (KESC); DISCO = distribution company, CWRD = Central and West Asia Department; CWEN = Energy and Natural Resources Division, CWRD; PRM = Pakistan Resident Mission

D. Processing History (MFF and Tranche 1) Approval of program concept paper 20 April 2009 Fact-finding mission 28 April-15 May 2009 Management review meeting (MRM) - 1st 8 June 2009 Appraisal mission 29 June-7 July 2009 Staff Review Committee (SRC) meeting 17 July 2009 Loan negotiations/FFA signing 12-13 August 2009 Board circulation 27 August 2009 Board approval of MFF 17 September 2009 Management approval of Tranche 1 22 September 2009 Loan agreement signing 29 April 2010 (L2552/L2553), 9 July 2010 (L8246) Loan effectiveness, including conditions 30 August 2010 (L2552/2553), 9 July 2010 (L8246)

Annex 1: MFF and Project Description

A. MFF

Design Summary Performance Targets/ Indicators

Data Sources/ Reporting Mechanisms

Assumptions and Risks

Impact Pakistan's energy security achieved, and demand and supply balanced in an environmentally sustainable manner

Electricity and gas rationing terminated by 2012 4.5 MTOE (188,406 TJ) of energy saved annually starting 2013 GHG emissions reduced by 30% from 2009 levels by 2018 from less fossil fuel use through clean technology and practice applications Industrial production grows by 10% annually from 2012

Annual national statistics and economic publications Energy sector yearbook Energy utility reports Industry reports

Assumptions Stable macroeconomic conditions

Additions in supply capacity (indigenous and import) come online

Sector financial and operating performance improves

GOP follows through with policy actions

Outcome Energy efficient and energy productive Pakistan Clean technology market transformed Energy efficiency and climate change mainstreamed in national development strategy

Households energy bill cut by 25% from 2010 Clean technology investments increase by 20% per year starting 2010

Energy bills lowered by 30% for businesses from 2011 Improved financial and operating performance of sector utilities from 2011 Commercial ESCO businesses established and operating by 2011 Customers receive uninterrupted, reliable and quality energy services from 2013 Oil imports reduced by 22% from 2014

MTDF National Energy Efficiency Roadmap Implementation Progress Reports National budget reports Energy utility reports Industrial association survey and reports

Assumptions Rational energy pricing achieved

Industries have continued access to financing and invest in clean energy

Efficient equipment and appliances are available in the retail market

Outputs A dynamic and integrated policy, institutional, legal and regulatory framework achieved for energy efficiency

National energy efficiency policy coordination and roadmap management function established in the Planning Commission by 2009

GOP policy decisions GOP Public Procurement Rules and Public Procurement Regulatory Authority Ordinance

Assumptions Projects implemented on time

GOP onlends at favorable rates

Risks Delays in reforms

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Design Summary Performance Targets/ Indicators



Gender mainstreamed in energy planning and policies A national energy efficiency standards, testing, certification, and labeling regime established DSM mainstreamed in energy utility operations Obsolete technology and equipment phased out from energy supply and demand side

Ten-year National Energy Efficiency Action Plan adopted by 2010 MEPS for equipment and appliances established and harmonized with international standards from 2010 to 2014 Public procurement guidelines revised to mandate energy efficiency by 2011 Energy efficiency tariffs rationalized to reflect cost of service by 2010 Electricity peak demand reduced by 1,094 MW, and 2,670 GWh electricity saved annually starting 2011 GHG emissions cut by at least 1 million tons CO2e starting 2010 918,942 TOE (38,474 TJ) energy saved annually from reducing gas, oil, and coal use in homes and industries starting 2012 601,671 TOE (25,191 TJ) energy saved annually from reducing losses in power generation and gas transmission starting 2013

Project PCI-s PSQCA Pakistan National Standards Book Energy utility reports Industrial association survey and reports Project implementation progress reports Contract awards and disbursement reports

Weak political support Start-up delays Implementation delays Counterpart funding gap Lack of energy audit and other associated service capacity

Activities with Milestones 1. Road map and Investment Program approved April 2009 2. FFA signed by the Government and ADB by August 2009 3. Investment Program Management Support Project (2009–2017) 4. National Compact Fluorescent Lamp Project (2009–2011) 5. Industrial Energy Efficiency Financing Pilot Project (2010–2011) 6. Thermal Power Plant Loss Reduction Project (2010–2016) 7. Transmission and Distribution Loss Reduction Project (2011–2016) 8. Industrial Energy Efficiency Financing Project (2011–2015) 9. Buildings Retrofit Project (2012–2016) 10. Appliance Replacement Project (2012–2015)

Inputs ADB (project preparation) RETA $400,000 PPTA $600,000

MFF ADB: $780 million AFD: €150 million GOP: $200 million

ADB = Asian Development Bank, AFD = Agence Française de Développement, CFL = compact fluorescent lamp, CO2e = carbon dioxide equivalent, ESCO = energy service company, FFA = framework financing agreement, GHG = greenhouse gas, GOP = Government of Pakistan, GWh = gigawatt-hour, MEPS = minimum energy performance standards, MFF = multitranche financing facility, MTDF = medium-term development framework, MTOE = million tons of oil equivalent, PCI = Project Cycle-I, PSQCA = Pakistan Standards and Quality Control Authority, PPTA = project preparatory technical assistance, RETA = regional technical assistance, TJ = terajoule, TOE = tons of oil equivalent

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B. Tranche 1

Design Summary Performance Targets/Indicators

Data Sources/Reporting Mechanisms


Impact Energy-efficient and energy-productive Pakistan

Grid-connected customers receive uninterrupted and quality power supply from 2013 Improved financial and operating performance of sector utilities from 2011

National energy efficiency roadmap implementation progress reports National budget reports Utility customer sales data, billing profiles, and DISCOs’ monthly financial statements

Assumptions Rational energy pricing achieved

Industries have continued access to financing and invest in clean energy

Efficient equipment and appliances are available in the retail market

Outcome A dynamic and integrated policy, institutional, legal, and regulatory framework for energy efficiency established Inefficient, substandard incandescent bulbs phased out of the market

Public procurement guidelines revised to mandate energy efficiency by 2011 MEPS for equipment and appliances established and harmonized with international standards from 2010 to 2014 Accredited appliance and equipment testing facilities established at major regional centers by 2014 Households average energy bill cut by 25% from 2010 Increased sales of CFLs by 50% starting 2011

Government Public Procurement Rules and Public Procurement Regulatory Authority Ordinance Pakistan Standards and Quality Control Authority, and Pakistan National Standards Book Consumer surveys by project M&E consultants Domestic manufacturing, import, and sales data for incandescent bulb and CFL products

Assumptions Integrated energy planning and development platform functions Roadmap is updated regularly and implementation progress is rigorously monitored Retail distribution chain for CFL and other lighting product functions properly Customers awareness for proper use and disposal of CFLs is built

Outputs National CFL Project Electricity peak demand reduced by 1,094 MW Increased customer awareness of energy efficient lighting products

30 million (75% of remaining) incandescent bulbs in homes replaced with high quality CFL by 2011 2,132 GWh electricity saved annually starting in 2011 CO2 emissions reduced by 908,000 tons CO2e per year starting 2012 CFLs sold in Pakistan carry certification mark by 2011 Mandatory disposal requirements set for mercury-laced products by 2015 Lamp waste collection and recycling demonstration facility established by 2010

DISCOs’ monthly sales data, customer billing records, and CFL voucher redemption analysis Daily load profiles from PEPCO and DISCOs Project monitoring data from consultants and M&E reports by project consultants MEPS and labeling requirements adopted by PSQCA Environmental Protection Agency ordinance Commissioning certificate

Assumptions Customers accept standardized CFLs and replace the working incandescent bulbs and use the CFLs for 3.69 hours per day Two thirds of project CFLs are used at the same peak hour (coincidence factor of 0.66) for all CFL light points) The CFL project becomes eligible to earn CER revenues under the CDM process Activities supported by development partners are properly coordinated

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Data Sources/Reporting Mechanisms


Investment Program Management Support Project Energy efficiency and climate change mainstreamed in national development strategy A national energy efficiency standards, testing, certification, and labeling regime created

National energy efficiency policy coordination and roadmap management function established in the Planning Commission by 2009 Ten-year national energy efficiency action plan adopted by 2010 Fully equipped testing and certification laboratories for lighting devices established by 2011

Roadmap implementation progress reports

Risks CFLs leaked into the commercial or other markets

Activities with Milestones Inputs 1. Preparatory Activities 1.1 Preparation and approval of Project Cycle-1 by Q3 2009 1.2 Recruitment of project implementation consultant by Q4 2009 1.3 Procurement of communications services by Q4 2009 1.4 Recruitment of M&E consultants by Q1 2010 2. CFL Procurement and Distribution: Phase 1 2.1 Finalization of CFL bidding documents by Q3 2009 2.2 CFL packaging and promotional materials by Q3 2009 2.3 CFL tendering and evaluation by Q4 2009 2.4 CFL procurement, shipment, and inspection by Q1 2010 2.5 Voucher printing and distribution by Q1 2010 2.6 CFL communication campaign by Q2 2010 2.7 Preparatory distribution activities and contracting by Q4 2009 2.8 CFL delivery to bulk distribution points by Q1 2010 2.9 CFL distribution to customers Q2-Q3 2010 3. Program Evaluation: Phase 1 3.1 Voucher redemption analysis by Q3 2010 3.2 Consumer surveys by Q3 2010 4. CFL Procurement and Distribution: Phase 2 4.1 Finalization of CFL bidding documents by Q3 2010 4.2 CFL tendering and evaluation by Q4 2010 4.3 CFL procurement, shipment, and inspection by Q1 2011 4.4 Preparatory distribution activities and contracting by Q1 2011 4.5 Voucher printing and distribution by Q2 2011 4.6 CFL delivery to bulk distribution points by Q2 2011 4.7 CFL communication campaign by Q2 2011 4.8 CFL distribution to customers by Q3-Q4 2011 5. Program Evaluation: Phase 2 5.1 Voucher redemption analysis by Q3 2011 5.2 Consumer surveys by Q4 2011 6. Project M&E Q2 2010 – Q4 2011

National CFL Project ADB: $40 million loan AFD: €20 million loan Government: $20,000,000 Total: $85,000,000 Investment Program Management Support Project ADB: $20 million loan Government: $5 million

ADB = Asian Development Bank, AFD = Agence Française de Développement, CDM = clean development mechanism, CER = certified emission reduction, CFL = compact fluorescent lamp, CO2e = carbon dioxide equivalent, DISCO = distribution company, FTL = fluorescent tube lamp, GWh = gigawatt-hour, kWh = kilowatt hour, MEPS = minimum energy performance standards, M&E = monitoring and evaluation, MW = megawatt, PEPCO = Pakistan Electric Power Company, PMU = project management unit, PSQCA = Pakistan Standards and Quality Control Authority. Source: Asian Development Bank.

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Annex 2: MFF Program and Project Management )

A. Sponsors, Stakeholders and External Agencies

Institution Sponsor Stakeholder External

Agency Remarks

Primary Secondary Asian Development Bank (ADB) x

Agence Francaise de Developpement (AFD)

x Tranche 1: cofinancier for National CFL Project through Loan 8246

Economic Affairs Division (EAD) x Acts on behalf of the Borrower in approving finance- related matters

Planning Commission of Pakistan

x Executing Agency for MFF

[to be replaced by MoWP]

Ministry of Finance (MOF) x

Ministry of Water and Power (MOWP)

x [Executing Agency for MFF]

ENERCON under Ministry of Environment

x

Advises PMO on energy efficiency policy formulation and implementation, and ensures relevant implementing agencies comply with procedures for applying for carbon credits

National Electric Power Regulatory Authority (NEPRA)

x

Ministry of Petroleum and Natural Resources

x

Pakistan Electric Power Company (PEPCO)

x Tranche 1: Procurement for National CFL Project

power distribution companies (DISCOs) under PEPCO

x Tranche 1: Implementing agencies for National CFL Project Karachi Electric Supply Project

(KESC) x

power generation companies (GENCOs)

x Tranche 2: Implementing agencies

electricity, oil and gas consumers in residential, industrial and commercial sectors

x

manufacturers and suppliers of lighting products

x

Hagler Bailly Pakistan x domestic consulting firm

Econoler International x international consulting firm

Energy Efficiency and Conservation Consultative Group

x platform for stakeholder consultations

Pakistan's energy sector x See organizational structure

Pakistan: Energy SectorOrganizational Structure

Office of Prime Minister

Advisor to PMOn Energy

Ministry of Water & Power

Ministry of Planning &

Development (Energy Planning

Wing)

National Electric

Power Regulatory Authority (NEPRA)

Ministry of Finance

(Subsidies/Tariffs & Circular Debt)

Oil & Gas Regulatory

Authority (OGRA)

Ministry of Environment(Clean Dev

Mechanism Cell)

Ministry of Privatization

(IPOs/outright sales of energy

assets)

Pakistan Atomic Energy

Commission (PAEC)

Ministry of

Petroleum & Natural Resources

Cabinet Committee on

Energy

Alternate Energy Development Board (AEDB)

Private Power Infrastructure Board (PPIB)

Water & Power Development

Authority (WAPDA)

Pakistan Electric Power Company

(PEPCO)

National Transmission and

Despatch Company (NTDC)

3 Power Generation Companies (GENCOs)

ENERCON

Central Power

Purchase Agency (CPPA)

Karachi Nuclear Plant (KANUPP)

Chashma Nuclear Plant

(CHASHNUPP)

8+1 Power Distribution Companies(DISCOs)

To date Generation

Licences given to 32 Small Power

Producers (SPPs) & 18 Independent Power Producers

(IPPs)

Pakistan Petroleum Limited

(PPL)

Pakistan State Oil (PSO)

Oil & Gas Development Corporation (OGDCL)

Provincial Coal Development

Authorities

Provincial Departments of irrigation & Power produce power below

50 MW (primarily through mini.& small hydels) and contract/sell directly to NTDC/DISCOs through appropriate power purchase

agreements

Note: All entities at one level/hierarchy share information on a need to know basis

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B. Organization Structures

1. MFF Program Management

EEIP = Energy Efficiency Investment Program, EIA = environmental impact assessment, IT = information and technology, LAN = local area network, M&E = monitoring and evaluation, PMO = program management office. Source: Asian Development Bank.

[MoWP]

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2. Project Management (Tranche 1)

a. National CFL Project

ADB AFD

Government (Borrower)

Loan ($65 million)

MOWP (Executing Agency)

CFL Supplier(s)

DISCO Distribution

Network

CFLs including

media campaign

($65 million)

$

Household Customers

PEPCO (procurement

support) Distribution

Costs ($20 million equivalent in Pakistan

rupees)

DISCOs $

$

$

CFL

CFL

CDM Revenue

($30 million)

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b. Investment Program Management Support Project

Organogram of PMO

Steering Committee

Secretary (Water & Power)

Project

Director/A.S

Manager Program Development &

Evaluation

Manager Policy & Coordination

Manager Finance & Admin

Deputy Project Director

Deputy Manager Projects

Deputy Manger Monitoring and

Evaluation (To be confirmed)

Legal Expert Energy Efficiency Engineers Expert

Gender, Safeguard Environment Expert

Energy Finance & Economics Expert (To be confirmed)

Deputy Manager Accounts, Admin

Deputy Manager Procurement &

Finance

Asstt Manager Accounts (No.1)

Asstt Manager Procurement (No.1)

Asstt Manager Projects

(Nos. 2)

Asstt Manager Monitoring &

Evaluation (Nos.2) (To be confirmed)

Asstt Manager

IT (No.1)

Support Staff Office Secretary / Computer experts (Nos. 5) Office Assistants, Record Keepers (Nos. 8 – to be confirmed) Chokidar / Guard, Drivers & Support Staff (Nos. 3,Nos. 08, Nos. 10 – to be confirmed) PMO = Project Management Office, SEE PMO= Sustainable Energy Efficiency Program Management Office

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C. Roles and Responsibilities

1. Strategic and Overall Management

5. ADB and AFD provide strategic direction, resources and financing, as agreed, and review progress. They also ensure that the MFF complies with the statutory requirements, and ADB's policies and procedures, including on anticorruption. 6. EAD acts on behalf of the Borrower and will approve all project finance related matters.

2. MFF Program Management

7. The Ministry of Water and Power (MOWP), as the Executing Agency (EA) for the [MFF Investment Program], is responsible for supervision, manages overall implementation, and monitor and report progress to the relevant authorities within the Government and ADB, and undertake annual audits. It is responsible for submitting periodic financing requests to ADB. Individual projects and subprojects to be financed under the Investment Program are identified and prepared by the line or sector ministries and, as appropriate, concerned sector agency(ies). 8. The Program Management Office (PMO, Annex B.1) in MOWP oversees the implementation of each tranche, including monitoring compliance with performance milestones, environmental requirements, and social safeguards. It will also recruit consultants to support relevant agencies to prepare future investment projects. External expertise will be provided under the program to support PMO in the implementation of the Energy Efficiency Sector Roadmap and for adopting best practices in project and policy development, as well as human resource development and training. Key tasks cover the following aspects: Planning: looking ahead to implementation and determining the elements of the project;

for each element, scheduling durations, resources, costs, etc. Organizing: selecting the project team and determining the team’s responsibilities; Managing: coordinating activities of the project team, contractors, consultants, clients, and/or financing agencies; Supervising: implementing control techniques for design reviews, construction checks, milestone assessments, progress meetings, and reports, both informal and formal; and Financial controlling: administering financial aspects such as invoice approvals, progress certificates, payment of accounts, etc. 3. Project Management (Tranche 1)

9. National CFL Project (Loan 2552/8246). Pakistan Electric Power Company (PEPCO) carries out procurement on behalf of the EA for this project, MOWP. Eight distribution companies (DISCOs) and Karachi Electric Supply Company (KESC) help implement the project in their respective license areas (Annex 2.B.2). PEPCO (i) carries out bulk procurement of CFLs, (ii) organizes a public awareness campaign, and (iii) coordinates and monitors project implementation activities. 10. The DISCOs and KESC are responsible for (i) distributing CFLs to all eligible households; (ii) collecting and disposing all incandescent bulbs replaced; (iii) project accounting and financial management; and (iv) project reporting, auditing, and evaluation.

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11. The project management units established in PEPCO and eight DISCOs under the ADB-assisted Power Distribution Enhancement Investment Program 1 are also responsible for implementing this project. They will coordinate and manage their respective project activities, and liaise with the EA and project consultants. 12. Program Management Support Project (Loan 2553). MOWP is also the EA for this project. The PMO is managed by a project director, and deputy project director, reporting daily to the Secretary (Water & Power), and interacting with ADB and other relevant project financiers and partner agencies through the ADB resident mission or designated entity. The PMO is supported, as required, by project consultants engaged by the Government or ADB for project design and implementation requirements, and Government capacity development needs. It is also recruiting consultants to support sector agencies to prepare projects to be financed under the Investment Program. External expertise are supporting the PMO in implementing the road map actions and adopting best practices in project and policy development, and human resource development and training.

1 ADB. 2008. Report and Recommendation of the President to the Board of Directors on a Proposed Multitranche

Financing Facility to the Islamic Republic of Pakistan for the Power Distribution Enhancement Investment Program. Manila.

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Annex 3: Procurement Plan )

13. Procurement of works and goods to be financed under the MFF will be implemented following ADB’s Procurement Guidelines (2010, as amended from time to time). Consultants will be selected and engaged following ADB's Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers (2010, as amended from time to time). A. Advance Contracting and Retroactive Financing

14. ADB approved advance contracting and retroactive financing as requested by the Government. For expenses incurred before tranche effectiveness to be eligible for retroactive financing, procurement and recruitment procedures must be fully compliant with ADB's guidelines. At effectiveness, up to 20% of such tranche proceeds may be used to retroactively finance eligible expenditures incurred during the period not exceeding 12 months prior to signing of the loan agreement. Alternatively, the Government may also opt for advance contracting without retroactive financing, in which case, the procurement procedures completed under advance contracting do not conclude with the contract award until after the tranche becomes effective. Approval of advance contracting and retroactive financing does not commit ADB to finance any of the proposed projects. B. Procurement Plans

15. Each project approved under the individual tranches has its own procurement plan. Available project procurement plan/s are on ADB's website, www.adb.org/Projects/reports.asp?key=reps&val=PP, which are updated at least annually covering the next 18 months. The original procurement plan for Tranche 1 is in Annex 3-A, and revised procurement plans in Annex 11-A and 11-C. C. National Competitive Bidding

16. National competitive bidding (NCB) is normally used for public procurement in the country of the borrower, and may be the most appropriate way of procuring goods or works which, by their nature or scope, are unlikely to attract foreign competition. NCB in Pakistan follows the procedures in the Public Procurement Rules 2004.2 To be acceptable for use in ADB-financed procurement, these procedures shall be reviewed and modified as follows to assure economy, efficiency, transparency, and broad consistency with the provisions included in ADB's Procurement Guidelines. 17. Registration. Bidding shall not be restricted to preregistered firms and such registration shall not be a condition for participation in the bidding process. Where registration is required prior to award of contract, bidders (i) shall be allowed a reasonable time to complete the registration process, and (ii) shall not be denied registration for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through postqualification. 18. Prequalification. Normally, postqualification shall be used unless prequalification is explicitly provided for in the loan agreement and/or procurement plan. Irrespective of whether

2 SRO 432 (1)/2004 issued on 9 June 2004 by the Public Procurement Regulatory Authority Ordinance 2002 (XXII of

2002) of the Islamic Republic of Pakistan.

http://www.adb.org/Projects/reports.asp?key=reps&val=PP

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postqualification or prequalification is used, eligible bidders (both national and foreign) shall be allowed to participate.

19. Bidding period. The minimum bidding period is 28 days prior to the deadline for the submission of bids.

20. Bidding documents. Procuring entities shall use the applicable standard bidding documents for the procurement of goods, works, and services acceptable to ADB. 21. Preferences. No domestic preference shall be given for domestic bidders and for domestically manufactured goods. 22. Advertising. Invitations to bid shall be advertised in at least one widely circulated national daily newspaper or freely accessible, nationally known website allowing a minimum of 28 days for the preparation and submission of bids. NCB contracts estimated to cost $500,000 or more for goods and related services and $1,000,000 or more for civil works will be advertised on ADB’s website via the posting of the Procurement Plan. 23. Bid Security. Where required, bid security shall be in the form of a bank guarantee from a reputable bank. 24. Bid Opening and Bid Evaluation. (i) Bids shall be opened in public. (ii) Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest evaluated bidder. (iii) Bidders shall not be eliminated from detailed evaluation on the basis of minor, nonsubstantial deviations. (iv) No bidder shall be rejected on the basis of a comparison with the employer's estimate and budget ceiling without ADB’s prior concurrence. (v) A contract shall be awarded to the technically responsive bid that offers the lowest evaluated price and no negotiations shall be permitted. 25. Rejection of all bids and rebidding. Bids shall not be rejected and new bids solicited without ADB’s prior concurrence. 26. Participation by Government-owned enterprises. Government-owned enterprises in Pakistan shall be eligible to participate as bidders only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not a dependent agency of the contracting authority. Furthermore, they will be subject to the same bid and performance security requirements as other bidders. 27. ADB member country restrictions. Bidders must be nationals of member countries of ADB, and offered goods and services must be produced in and supplied from member countries of ADB.

Annex 3-A Original Procurement Plan for Tranche 1

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ANNEX 3-A: PROCUREMENT PLAN FOR TRANCHE 1

Project Name: Energy Efficiency Investment Program, Tranche 1

Country: Pakistan Executing Agency: (i) Planning Commission, (ii) Ministry of Water and Power

Loan Amount: OCR: $40 million, ADF: $20 million Loan (Grant) Number: TBD

Date of First Procurement Plan: 13 August 2009 Date of this Procurement Plan: 13 August 2009

A. Process Thresholds, Review, and 18-Month Procurement Plan

1. Project Procurement Thresholds

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works Method Threshold

International Competitive Bidding (works) At least $5,000,000

International Competitive Bidding (goods) At least $1,000,000

National Competitive Bidding (works) Less than $5,000,000

National Competitive Bidding (goods) Less than $1,000,000

Shopping Less than $100,000

2. ADB Prior or Post Review

2. Except as ADB may otherwise agree, the following prior- or post-review requirements apply to the various procurement and consultant recruitment methods used for the project.

Procurement Method Prior or Post Comments Procurement of Goods and Works ICB Works Prior NCB Works Prior The first NCB contract is

subject to prior review by ADB

Recruitment of Consulting Firms

Quality- and Cost-Based Selection (QCBS) Prior Full Technical Proposal: At least $600,000

Simplified Technical Proposal: Less than $600,000 but at least $200,000

Other selection methods: Consultants Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget (FBS), and Single Source (SSS)

Prior Biodata Technical Proposal

Recruitment of Individual Consultants

Individual Consultants Prior

B. Goods and Works Contracts Estimated to Cost More Than $1 Million

3. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

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Funding Source General

Description Contract

Value Procurement

Method Prequalification of Bidders (y/n)

Advertisement Date

(quarter/year) Comments

OCR Procurement of 10 million CFLs

$19.0 million

ICB (AP) No Q3 2009 Single-stage, two-envelope

OCR Procurement of 20 million CFLs

$37.0 million

ICB No Q2 2010 Single-stage, one-envelope

ADF Design, supply, and install for waste management facility

a

$2.0 million

ICB Turnkey No Q4 2010 Using single-stage, single envelope turnkey method

a Recycling and disposal for all used fluorescent lamps.

ADB = Asian Development Bank, AFD = Agence Française de Développement, AP = advance procurement, ICB = international competitive bidding, CFL = compact fluorescent lamp, SBD = standard bidding document.

C. Consulting Services Contracts Estimated to Cost More Than $100,000

4. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Funding Source

General Description

Contract Value

Recruitment Method

1

Advertisement Date

(quarter/year)

International or National Assignment

Comments

ADF Management of Investment Program

$1.6 million

QCBS (quality: cost ratio,

80:20)

Q3 2009 International and national

FTP

AP

ADF Feasibility studies for subsequent tranche

$2.0 million


80:20)


FTP

ADF Project monitoring and evaluation for tranche 1

$1.0

million


80:20)


STP

ADF Post-PDD CDM requirements

$1.2 million


80:20)

Q1 2010 STP

ADF Institutional Strengthening and Capacity Building

$2.0 million

TBD TBD TBD

ADF = Asian Development Fund, AP = advance procurement, FTP = full technical proposal; STP = simplified technical proposal; QCBS = quality- and cost-based selection, TBD = to be determined.

D. Goods and Works Contracts Estimated to Cost Less Than $1 Million and Consulting Services Contracts Less Than $100,000

5. The following table groups smaller-value goods, works, and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Annex 3-A Original Procurement Plan for Tranche 1

19

Funding Source

General Description

Value of Contracts

(cumulative) Number of Contracts

Procurement / Recruitment

Method1 Comments

ADF a. Operations Vehicles

0.20 2 Shopping

ADF b. Furniture and Office Equipment

0.10 Various Shopping

ADF c. Tools and Maintenance Equipment

0.10 Various Shopping

E. Indicative List of Packages Required Under the Project

6. The following table provides an indicative list of all procurement (goods, works, and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

General Description

Estimated Value

(cumulative)

Estimated Number of Contracts

Procurement Method

Domestic Preference Applicable Comments

1. Goods a. Compact fluorescent lamps (2 packages)

$56.0 million 3 ICB Yes Package 1 will be one contract whereas Package 2 is subdivided in two lots; in total the procurement will be in three contracts

b. Operations Vehicles

$0.20 million 2 Shopping No

c. Furniture and office equipment

$0.10 million various Shopping No

d. Tools and maintenance equipment

$0.10 million various Shopping No

2. Turnkey a. Design, supply, and install for lamp waste management facility

$2.0 million 1 ICB turnkey

3. Consulting Services a. Management of Investment Program

$1.6 million 1 QCBS (international)

FTP

b. Feasibility studies for tranche 2


FTP

c. Project monitoring and evaluation for tranche 1


STP

d. Post-PDD CDM requirements

$1.2 million 1 QCBS STP

e. Institutional strengthening and capacity building

$2.0 million TBD TBD TBD

4. To Be Determined Design and implement a CFL communication campaign

$2.5 million 1 TBD NA With attendant services procured as "related services" (AP). Procurement method to be determined later.

ICB = international competitive bidding, DP = Direct Procurement, NCB = national competitive bidding, QCBS = quality- and cost-based selection. Source: Asian Development Bank estimates.

Annex 4: Safeguards Plan )

A. MFF

28. All tranches and projects under the MFF are implemented in accordance with ADB's safeguard policies and guidelines and the laws and regulations of Pakistan. They adhere to the Environmental Assessment and Review Framework (EARF) prepared for the MFF, which complies with the Pakistan Environmental Protection Act 1997 and associated rules, regulations, and guidelines, and ADB’s Environment Policy (2002) and Environmental Assessment Guidelines (2003). Details of the safeguard requirements common to all and projects under the MFF are described in the succeeding paras.

1. Environmental Safeguards

29. Categorization. Overall, the Investment Program will result in a range of environmental benefits. Most of the projects are expected to be Category C. 30. Requirements during preparation of subsequent projects. If a project meets the specific environmental criteria in the EARF, then environmental assessment is conducted by the implementing agency. The project is then categorized by ADB through the environmental categorization and rapid environmental assessment forms. Environmental impact assessment reports are afterwards prepared for Category A and B (sensitive) projects, and initial environmental examination (IEE) reports for Category B projects. The reports are attached to the periodic financing request (PFR) submitted to ADB for the tranche. Details on the procedure, reports, and other requirements are in the EARF. 31. Requirements during implementation of subsequent projects. All projects must strictly follow the mitigation measures in the IEEs, the EMPs and the EARF. Specifically, (i) mitigation measures identified in the EMPs are incorporated in bidding documents and civil work contracts, and implemented under the implementing agencies' supervision; (ii) bidding documents include a reference to the EMPs; (iii) EMPs include an item on environment-friendly procurement; and (iv) environmental monitoring reports are submitted to ADB twice annually during the construction and operation period.

2. Social Safeguards

32. Involuntary Resettlement. Land acquisition and resettlement are not envisioned for projects financed under the Investment Program. If such a need occurs, each implementing agency (i) ensures that all land and rights-of-way required by the projects are made available on time; and (ii) prepares a land acquisition and resettlement framework or plan according to relevant terms, all applicable laws and regulations of Pakistan, and ADB’s Involuntary Resettlement Policy (1995). Prior to any land acquisition, the EA seeks ADB's advice on documentation requirements. 33. Indigenous Peoples. As no project is planned in the Khyber Pakhtunkhwa (previously known as North West Frontier Province), which is the only area with formally identified indigenous people, indigenous peoples are not envisioned to be affected under the Investment Program. If such should occur, the Government will cause each implementing agency to ensure that all projects affecting ethnic minorities are constructed and operated in accordance with the

21

requirements of ADB’s Policy on Indigenous Peoples (1998), as specified in the indigenous peoples development plans agreed with ADB. 34. Gender. Each implementing agency monitors the projects’ effects on women during each project, through, where relevant, gender-disaggregated data collected pursuant to the monitoring and evaluation system referred to in the projects' performance monitoring systems. 35. Sexually transmitted diseases and HIV/AIDS. All civil works contractors must disseminate information at worksites on the risks of sexually transmitted diseases and HIV for those employed during construction. Contracts require contractors to frequently lecture on the diffusion of HIV/AIDS, and compliance is strictly monitored. 36. Women and child labor. All civil works contractors must (i) comply with all applicable labor laws of Pakistan and pertinent occupational health and safety regulations; (ii) use their best efforts to employ women living in the vicinity of the project and/or subproject area; (iii) not differentiate between men and women’s wages or benefits for work of equal value, and (iv) not use child labor. Contracts require contractors' adherence to Core Labor Standards, and compliance is strictly monitored. B. Tranche 1

37. Aside from the safeguard requirements for the whole MFF, the following apply to Tranche 1 projects.

1. Environmental Safeguards

38. Based on the IEE (Supplementary Appendix I of the RRP), the National CFL Project (Loan 2552/L8246) is Category B. A key environmental risk is lamp waste accumulation. To avoid this risk, the Program Management Support Project (Loan 2553) provides for a lamp waste management facility. In general, there are no potential significant adverse environmental impacts that warrant specific environmental monitoring.

2. Social Safeguards

39. The Tranche 1 projects neither entail land acquisition or economic or physical resettlement, nor affect indigenous peoples.

Annex 5: Financing Plan )

A. MFF

1. Priority Investment Financing Plan ($ million)

Priority Area Total Government ADB AFDa

A1. Supply Side

Thermal Power Plant Rehabilitation 550 90 370 90

Transmission and Distribution Upgrades 130 21 87 21

A2. Demand Side

Compact Fluorescent Lamp Project 85 20 40 25

Industrial Energy Efficiency Financing 250 41 168 41

Building Retrofits 60 10 40 10

Gas and Electric Appliance Replacements 80 13 54 13

B. Investment Program Management 25 5 20 0

Total (A1+A2+B) 1,180 200 780 200

a Agence Francaise de Developpement, €150 million equivalent

Sources: ADB and Planning Commission estimates.

2. Financing Terms

40. The maximum financing amount available under the Facility is $780 million, provided in separate tranches in the form of loans and/or guarantees from ADB’s (i) ordinary capital resources for physical investments (A1 and A2 above), and (ii) Special Funds resources for non-physical investments (B above). Tranches are provided in sequence or simultaneously. Additional $200 million equivalent would be cofinanced by AFD for A1 and A2. 41. The Government submits a periodic financing request (PFR) for each tranche to ADB. ADB reviews the PFR(s) and, if found satisfactory, prepares the related legal agreements. The projects for which financing is requested under the PFR are subject to the selection criteria in the FFA, satisfactory due diligence, and relevant safeguards and fiduciary frameworks and other documents. Until notice is otherwise given by Pakistan, the Planning Commission is the authorized representative for executing PFRs. 42. Each tranche may be financed under terms different from the financing terms of previous or subsequent tranches. The choice of financing terms depends on the project, capital market conditions, and ADB’s financing policies prevailing on the date the tranche's legal agreement is signed. ADB's regulations for loans funded by ordinary capital resources and Special Funds resources apply, as appropriate.4 43. Advance contracting and retroactive finance are applicable to the MFF.

4 (i) 2001. ADB. Ordinary Operations Loan Regulations Applicable to LIBOR-Based Loans Made from ADB's

Ordinary Capital Resources. Manila; (ii) 2006. Special Operations Loan Regulations Applicable to Loans Made by ADB from Its Special Funds Resources. Manila

23

3. Disbursement Arrangements

44. Disbursements follow ADB’s Loan Disbursement Handbook. The last date for any disbursements under any tranche is 16 September 2019. The last financing tranche is expected by 31 December 2014.

4. Fund Flow

(To be completed after PC-II approval)

5. Financial Accounting and Audit

45. The EAs will independently (i) maintain separate accounts for each of their projects under the MFF, (ii) have such accounts audited annually, in accordance with appropriate auditing standards applied by independent auditors whose qualifications, experience, and terms of reference are acceptable to ADB following its guidelines on Financial Management and Analysis of Projects (2007, as amended from time to time), and (iii) furnish certified copies of such audited project accounts, audited financial statements and the auditors’ opinion (including the separate opinions on the proper use of the grant proceeds, the imprest account and the statement of expenditure procedure, and compliance with the financial covenants of the grant agreement, and such other information concerning the audit requested to ADB) within 6 months from the end of each related fiscal year. The independent auditors will be engaged and financed by the Government or EAs. B. Tranche 1

1. Financing Plan ($ million)

Project Total Government ADB AFD a

National Compact Fluorescent Lamp Project 85 20 (Loan 2552) 40 25

Investment Program Management Support Project 25 5 (Loan 2553) 20

Total 110 25 60 25 a €20 million equivalent.

Source: ADB estimates.

2. Financing Terms

46. Following the Loan Agreements between ADB and the Ministry of Economic Affairs and Statistics, $40 million is being provided from ADB's ordinary capital resources (Loan 2552), and $25 million equivalent from AFD for the National CFL Project (L8246); and $20 million from ADB's Special Funds (Loan 2553). 47. Loan 2552 has a term of 10 years with grace period, with interest at a rate equal to the sum of LIBOR and 0.60%, less a credit of 0.40%. A commitment charge of 0.15% per annum accrues on the full amount of the loan (less amounts withdrawn), commencing 60 days after the date of the Loan Agreement. 48. Loan 8246 is for €20 million or $25 million equivalent. The interest rate and other details are in the Credit Facility Agreement between AFD and the Government.

24

49. Loan 2553 is in various currencies equivalent to Special Drawing Rights (SDR) 12,776,000, with a term of 23 years with grace period. The interest is 1% per annum during the grace period, and 1.5% per annum thereafter.

3. Disbursement Arrangements

50. The last date for disbursements is 31 July 2012 under Loan 2552, 31 March 2017 under 31 July 2012, and 31 December 2014 under Loan 8246.

4. Allocation of Proceeds

Loan 2552/8246

Item

Loan 2552 (OCR) Loan 8246 (AFD)

Amount Allocated ($)

Percentage of Financing

Amount

Allocated ($)a


Goods (CFL) 34,462,000 62% of total expenditure

21,538,000 38% of total expenditure Communication

Campaign 1,538,000 962,000

Interest and Commitment Charges

2,154,000 62% of amount due


Unallocated 1,846,000 1,154,000 Total 40,000,000 25,000,000

a approved allocation is in euros, totalling €20 million equivalent

Loan 2553 (ADF)

Item Amount Allocated

(SDR) Percentage of

Bank Financing Consulting Services-Project Preparation 2,875,000 100% of total

expenditure Consulting Services-Standards and Testing 511,000 Consulting Services-Institutional Capacity Development

1,916,000

Equipment-Project Preparation 128,000 Equipment-Standards and Testing 2,555,000 Lamp Waste Management Facility-Turnkey 1,278,000 Incremental PMO Staff Support 1,916,000 Interest Charge 319,000 100% of amount

due Unallocated 1,278,000

Total 12,776,000 ADF = Asian Development Fund, AFD = Agence Française de Développement, CFL = compact fluorescent lamp, OCR = ordinary capital resources, PMO = program management office

25

Annex 6: Investment (Cost) Plan )

A. Detailed Cost Estimate ($'000)

1. Loan 2552/8246

Item Total ADB % AFD % Gov't %

A. Investment Costs

1. Goodsa 56,000 34,462 62 21,538 38 0 0

2. Lamp Distribution 20,000 0 0 0 0 20,000 100

3. Communication Campaign 2,500 1,538 62 962 38 0 0

Subtotal (A) 78,500 36,000 22,500 20,000

B. Contingencies

1. Physical 2,560 1,575 62 985 38 0 0

2. Price 440 271 62 169 38 0 0

Subtotal (B) 3,000 1,846 1,154 0

Total before Financing Charge A+B 81,500 37,846 23,654 20,000

C. Financing Charges

1. Interest during implementation 3,400 2,054 62 1,346 38 0 0

2. Commitment charges 100 100 100 0 0 0 0

Subtotal (C) 3,500 2,154 1,346 0

Total 85,000 40,000 47 25,000 29 20,000 24

ADB = Asian Development Bank, AFD = Agence Française de Développement, CFL = compact fluorescent lamp, Gov’t = Government of Pakistan. Notes:

1. In mid-2009 prices. 2. Contingencies at 5% with price contingencies based on local inflation of 6% and foreign inflation of 0.7% 3. Interest during construction based on 10-year swap on US$ at 3.8% and spread of 20 basis points. 4. Commitment charges are 0.15%. 5. Relevant financing charges will be financed by each funding source.

a CFLs are exempt from customs duty and sales tax.


2. Loan 2553

Item Total ADB % Gov't %

A. Program Management

Incremental Staff Support 3,000 3,000 100 0 0

Facilities 1,200 0 0 1,200 100

B. Project Preparation

Consulting Services 4,500 4,500 100 0 0

Equipment 200 200 100 0 0

Facilities 600 600 100

26

Item Total ADB % Gov't %

C. Standards and Testing

Consulting Services 800 800 100 0 0

Equipment 4,000 4,000 100 0 0

Facilities 1,400 0 0 1,400 100

D. Institutional Capacity Development

Consulting Services 3,000 3,000 100 0

Facilities 300 0 0 300 100

E. Lamp Waste Management Facility

Turnkey 2,000 2,000 100 0 0

Facilities 1,500 0 0 1,500 100

F. Contingencies 2,000 2,000 100 0 0

G. Financial Charges 500 500 100 0 0

Total 25,000 20,000 80 5,000 20

ADB = Asian Development Bank, Gov't = Government of Pakistan. Source: ADB estimates.

B. Forecast of Cost to Complete

1. Loan 2552

L2552-PAK: Loan Amount = $40 million

- Cumulative Amount -

0.00

15.00

40.00 40.00 40.00 40.00

0.00

7.00

13.00

19.00

37.00

40.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12

$M

Projected CA

Projected Disb.

Co

mp

letio

n J

an

20

12

, C

losin

g

Ju

ly

20

12

27

2. Loan 8246

3. Loan 2553



0.00

10.00

25.00 25.00 25.00 25.00

0.00

5.00

20.00

25.00 25.00 25.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12

$M

Projected CA

Projected Disb.

Co

mp

letio

n

Ja

n 2

01

2,



0.00 0.30

5.00

7.008.00

10.00

12.00

14.00

16.0017.00

18.0019.00

20.00 20.00 20.00

0.00 0.10

2.15

3.81

5.46

7.12

8.77

10.92

13.0814.23

15.3816.54

17.6918.85

20.00

0.00

5.00

10.00

15.00

20.00

25.00

Jun-

10

Dec-

10

Jun-

11

Dec-

11

Jun-

12

Dec-

12

Jun-

13

Dec-

13

Jun-

14

Dec-

14

Jun-

15

Dec-

15

Jun-

16

Dec-

16

Jun-

17

$M

Projected Contract Awards

Projected Disbursements

Co

mp

letio

n S

ep

20

16

,

Clo

sin

g M

ar

20

17

Annex 7: Execution Plan

Preparatory Activities

Loan Processing

Loan negotiation ADB,EAD

MFF approval ADB

Loan effectivity ADB,EAD

Establishment of PMO and staffing PMO

Recruitment of Consultants

PMU consultant PMO

Monitoring Consultants

Consultants for T2 Design

Roadmap Implementation

Approval of national E3C strategy PC

Tranche 1

Preparation of Bidding Documents PEPCO

Bidding CFLs (Phase 1) PEPCO

CFL Communication Campaign PEPCO

Implementation Consultant PMO

Distribution of CFLs (Phase 1) DISCOs

Bidding CFLs (Phase 2) PEPCO

Distribution of CFLs (Phase 2) DISCOs

Tranche 2

Preparation of Tranche 2 Consultants

Submission of PFR 2

PFR 2 Review and approval

Bidding

Construction and Installation

Tranche 3

Preparation of Tranche 3

Submission of PFR 3


Bidding


Tranche 4


Submission of PFR 4


Bidding


Tranche 5


Submission of PFR 5


Bidding


Tranche 6


Submission of PFR 6


Bidding


Tranche 7


Submission of PFR 7


Bidding


Support Component

Capacity Development

Program Implementation Schedule

Tasks Responsible

Party

2009 2010 2011 2012 2013 2014 2015 2016 2017

Q-3 Q-4 Q-1 Q-2 Q-3 Q-4 Q-1 Q-2 Q-3 Q-4 Q-1 Q-2 Q-3 Q-4 Q-1 Q-2 Q-3 Q-4 Q-1 Q-2 Q-3 Q-4 Q-1 Q-2 Q-3 Q-4 Q-3 Q-4Q-1 Q-2 Q-3 Q-4 Q-1 Q-2

Annex 8: Performance Monitoring and Evaluation )

A. Deliverables and Performance Indicators

Deliverable Performance Indicators Physical Non-physical

National CFL Project (Loan 2552/8246)

30 million (75% of remaining) incandescent bulbs in homes replaced with high quality CFL by 2011 2,132 GWh electricity saved annually starting in 2011 CO2 emissions reduced by 908,000 tons CO2e per year starting 2012 CFLs sold in Pakistan carry certification mark by 2011 Lamp waste collection and recycling demonstration facility established by 2010

Mandatory disposal requirements set for mercury-laced products by 2015

Investment Program Management Support Project (Loan 2553)

Fully equipped testing and certification laboratories for lighting devices established by 2011

National energy efficiency policy coordination and roadmap management function established in the Planning Commission by 2009 Ten-year national energy efficiency action plan adopted by 2010

B. Progress Reports

51. The Ministry of Water and Power, as the EA of the Investment Program, monitors overall MFF implementation following the Design and Monitoring Framework (see Annex 1). The midterm reviews of individual projects evaluate compliances with the overall assurances given by the Government concerning the MFF. An Investment Program completion report will be prepared after completion of all projects under the MFF. 52. The EAs monitor individual projects under the MFF following the respective design and monitoring frameworks, and submit the reports below to ADB and the Planning Commission of Pakistan. Except for the annual audit, the formats for the reports are in Annex 10.

30

Project-Specific Deliverable Timing Environmental monitoring report Twice a year

Quarterly progress report on L2552/8246 Within 20 days from end of the

subject quarter

Quarterly progress report on L2553 Within 30 days from end of the subject quarter

Annual progress report on L2552

Within 20 days from end of the subject year

Annual progress report on Investment Program and all ongoing projects

Within 30 days from end of the subject year

Updated procurement plan covering next 18 months At least annually

Annual audit (refer to ADB financial management guidelines)

Within 6 months from end of the fiscal year

Project completion report Within 3 months of project completion

Annex 9: Major Covenants )

53. Below are the major covenants in the Framework Financing Agreement for MFF 0031, and project-specific covenants in the Loan Agreements. The status of compliance to both the MFF and project-specific covenants are reported in the progress reports (see Annex 8.B.). A. MFF

Covenant FFA Safeguards (see Annex 4) Environment. All projects shall strictly follow the mitigation measures in the Initial Environmental Examination, including the EMPs and the EARF.

Para 9, Schedule 6 (Undertakings) EMPs shall be incorporated in bidding documents and civil work contracts and

implemented under supervision of the lAs. EMPs shall include an item on environmentally friendly procurement. Environmental performance reports will be submitted to ADB twice annually during the construction period, including progress made on the mitigation measures, monitoring data, problems encountered, enforcement plan, complaints, violations or modifications to mitigation measures to take account of unexpected environmental impacts and the acceptability of the residual impacts. Involuntary Resettlement. The GOP shall ensure that all requirements in the EARF are complied with during processing and implementation of the projects under the Facility.

Para 7, Schedule 6 (Undertakings)

Should a need for land acquisition and resettlement occur during the implementation of any project financed under the Investment Program, the GOP prior to commencing relevant project activities shall promptly inform ADB of such a need and prepare relevant safeguard documents. Indigenous Peoples. Should indigenous peoples be affected under the Investment Program, the GOP shall cause each Implementing Agency to ensure that all projects affecting ethnic minorities are constructed and operated following the indigenous peoples plan.


Gender. The GOP shall cause each IA to monitor the projects' effects on women during each subproject implementation, through, where relevant, gender-disaggregated data collected pursuant to the monitoring and evaluation system referred to in the projects' performance monitoring systems.


Sexually transmitted diseases and HIV/AIDS. The GOP shall cause each IA to ensure that all civil works contractors disseminate information on at worksites on the risks of sexually transmitted diseases and HIV/AIDS for those employed during construction.


Women and child labor. The GOP shall cause each IA to ensure that all civil works contractors (i) comply with all applicable labor laws of Pakistan and pertinent occupational health and safety regulations; (ii) use their best efforts to employ women living in the vicinity of the project/subproject area; and (iii) are required not to differentiate between men and women's wages or benefits for work of equal value, and not to use child labor. Contracts for all projects to be financed under the Investment Program shall include specific clauses on these undertakings, and compliance shall be strictly monitored.

Economic Pakistan's energy security achieved, and demand and supply balanced in an environmentally sustainable way.

Schedule 2 (Design and Monitoring Framework for the Facility)

32

Covenant FFA Financial (see Annex 5) The GOP shall ensure, and cause the EA and the lAs to ensure, the availability and timely release of counterpart funding for the implementation of projects financed under the Investment Program.


Where applicable and required by ADB, the GOP shall ensure that each IA maintains a debt service coverage ratio of at least 1.2 two-years onwards after the effectiveness of the relevant tranche, and a self-financing ratio of at least 20% from one year onwards after the effectiveness of the relevant tranche.


The GOP shall ensure that all government paying authorities provide prompt payment to lAs, and in case of any shortfall from the paying authority, the GOP will finance such shortfall in a timely manner.


The GOP shall cause lAs to ensure that proper accounts and records are maintained in a timely manner to adequately identify the use of tranche proceeds in such a manner and details as may be specified in each loan agreement and project agreement. Audited financial reports of EA and each IA shall be submitted" to ADB within 6 months of the end of fiscal year to which they relate.


The GOP shall cause each IA to ensure that its internal controls are in accordance with national accounting standards and an independent and autonomous internal audit department is set up within each lA.


Sector The GOP shall ensure that the ADB is kept informed about Pakistan's policies and programs related to the energy sector that will affect the performance and financial viability of each project under the Investment Program and, in particular, policies and regulations relevant to energy supply, pricing, use, and efficiency. The GOP shall ensure that there will be an exclusive on-lending policy for projects financed under the Investment Program.


The MFF will finance projects in the following focus areas: (i) lighting and appliances in domestic, public and commercial sectors, (ii) energy loss reduction in thermal power generation, (iii) energy loss reduction technology in the gas transmission and distribution, and (v) industrial energy efficiency programs.

Schedule 4 (Selection Criteria and Approval Process for Projects)

The following criteria will be used to identify and select the projects to be financed under the MFF: (i) realizable potential for energy savings, (ii) mature and applicable technologies, (iii) financial and economic viability, (iv) implementation barriers and institutional capacities, and (v) residual environmental and social impacts.

Others The Ministry of Water and Power will establish a Program Management Office (the "Program MO") to manage the Investment Program. The Program MO will be responsible for supporting the Office of the [Secretary (Water&Power), MoWP] and the concerned agencies for the implementation of: (i) the Roadmap -- policy planning, interagency and. donor cooperation, and capacity building support;· and (ii) the Investment Program reporting, monitoring, selection and preparation of investment projects, and consultant support.

Para 2, Schedule 3 (Implementation Framework)

The Program MO will be sufficiently staffed under, and obtain resources from, the Investment Program Support Component of the MFF. The Program MO will inform the Energy Efficiency and Conservation Consultative Group ("EECCG") on the Roadmap and the implementation progress of the Investment Program, and will facilitate EECCG meetings. The Program MO will recruit consultants to support sector agencies to prepare projects to be financed under the MFF. External expertise will be provided to support the Program MO in the implementation of the Roadmap actions and for adopting best practices in project and policy development, as well as human resource development and training.

Para 3, Schedule 3 (Implementation Framework)

The midterm reviews for individual projects will evaluate compliance with the overall assurances given by Pakistan concerning the Facility.

Monitoring, Evaluation, and

33

Covenant FFA An Investment Program completion report will be prepared after the completion of all ADB-supported activities and projects under the Investment Program.

Reporting Arrangements

ADB = Asian Development Bank, EA = executing agency, EARF = environmental assessment and review framework, EMP = environmental management plan, FFA = Framework Financing Agreement, GOP = Government of Pakistan, IA = implementing agency, MFF = multitranche financing facility

B. Tranche 1 (Loan 2552/2553)

Covenant LA/FFA

Sector The Borrower shall ensure that the ADB is kept informed about its policies and programs related to the energy sector that are likely to affect the performance and financial viability of any project or, if any, subprojects financed under the Investment Program and, in particular, policies and regulations relevant to energy supply, pricing, use, and efficiency. The Borrower shall ensure that as and when necessary during the implementation of the Investment Program, there will be an exclusive on-lending policy for projects to be financed under the Investment Program.

Para 8, Schedule 5, LA-L2552/2553

Economic Where applicable and required by ADB, the GOP shall ensure that each IA maintains a debt service coverage ratio of at least 1.2 two-years onwards after the effectiveness of the relevant tranche, and a self-financing ratio of at least 20% from one year onwards after the effectiveness of the relevant tranche.

Para 3, Schedule 6, FFA

Safeguards (see Annex 4) Environment. The project shall strictly follow the mitigation measures in the Initial Environmental Examination, including the EMP and the EARF.

Schedule 6 (Undertakings), FFA; and Para 14, Schedule 5, LA-L2552/2553

The EMP shall be incorporated in bidding documents and related contracts and implemented under supervision of the lAs. The EMP shall include an item on environmentally friendly procurement. Environmental performance reports will be submitted to ADB twice annually during the construction period, including progress made on the mitigation measures, monitoring data, problems encountered, enforcement plan, complaints, violations or modifications to mitigation measures to take account of unexpected environmental impacts and the acceptability of the residual impacts. Involuntary Resettlement. The GOP shall ensure that all requirements in the EARF are complied with during processing and implementation of the projects under the Facility.

Para 7, Schedule 6 (Undertakings), FFA

Should a need for land acquisition and resettlement occur during the implementation of any project financed under the Investment Program, the GOP prior to commencing relevant project activities shall promptly inform ADB of such a need and prepare relevant safeguard documents.


Indigenous Peoples. Should indigenous peoples be affected under the Investment Program, the GOP shall cause each Implementing Agency to ensure that all projects affecting ethnic minorities are constructed and operated following the indigenous peoples plan.


Gender. The GOP shall cause each IA to monitor the projects' effects on women during each subproject implementation, through, where relevant, gender-disaggregated data collected pursuant to the monitoring and evaluation system referred to in the projects' performance monitoring systems.


Sexually transmitted diseases and HIV/AIDS. The GOP shall cause each IA to ensure that all civil works contractors disseminate information on at worksites on the risks of sexually transmitted diseases and HIV/AIDS for those employed during construction.


Women and child labor. The GOP shall cause each IA to ensure that all civil works contractors (i) comply with all applicable labor laws of Pakistan and pertinent

34

Covenant LA/FFA occupational health and safety regulations; (ii) use their best efforts to employ women living in the vicinity of the project/subproject area; and (iii) are required not to differentiate between men and women's wages or benefits for work of equal value, and not to use child labor. Contracts for all projects to be financed under the Investment Program shall include specific clauses on these undertakings, and compliance shall be strictly monitored.

Financial (see Annex 5) The Borrower shall maintain, or cause to be maintained, separate accounts for the Project; and furnish certified copies of audited accounts and financial statements and the auditor's report to ADB within 6 months after the end of each related fiscal year.

Article IV, Sec 4.02(a), LA-L2552/2553

Except as ADB may otherwise agree, the Borrower immediately after the Effective Date shall cause [MOWP] to establish an imprest account at a commercial bank acceptable to ADB.

Para 6/5, Schedule 3, LA-L2552/2553:

The Borrower shall ensure, and cause each IA to ensure, the availability and timely release of counterpart funding for Project implementation.


The Borrower shall ensure that all government entities make prompt payments, when due, to relevant IAs, and in case of the shortfall of any such payment from a government entity, the Borrower shall finance, or otherwise pay to the concerned IA, such shortfall in a timely manner.


The Borrower shall cause each IA to ensure that its internal controls are in accordance with national accounting standards and an independent and autonomous internal audit department is set up within each IA.


The Borrower shall comply with, and shall cause each EA and IA, any and all other organizations and entities involved to comply with, ADB's Anticorruption Policy (1998, as amended) and ADB's policy relating to Enhancing the Asian Development Bank's Role in Combating Money Laundering and the Financing of Terrorism (2003).


The EA and each IA shall ensure that all contracts financed by ADB in connection with the Project include provisions specifying the right of ADB to audit and examine the records and accounts of all contractors, suppliers, consultants and other service providers as they relate to the Project.


Others Established, Staffed, and Operating PMU/PIU. L2552.The Borrower shall cause each of DISCOs and KESC to: (a) act as an IA to help implement this Project; (b) distribute the CFLs procured under the Project through its distribution facilities to the households in the area that such DISCO or KESC is licensed to operate; and (c) design and implement its CFL distribution strategies, mechanisms, and plan.

Para 2, Schedule 5, LA-L2552

L2553. The Borrower shall cause that a PMO is established as a separate entity within MOWP, which will report directly to the Secretary (Water & Power), and with a full-time PMO Director and Deputy Director appointed by MOWP and supported by the consultants.


Fielding of Consultants. The Borrower shall recruit and cause the implementation consultants under the Project to PEPCO, DISCOs and KESC to carry out their respective responsibilities under this Project.


The Borrower shall cause MoWP to delegate relevant authorities to PEPCO, and establish a CFL procurement committee comprising representatives from (a) MoWP as chairman; (b) PEPCO as deputy chairman; and (c) PCP, each DISCO, KESC, the Power Distribution Enhancement Investment Program consultants, monitoring and evaluation consultants under the Program Support Project, and other ministries as members. The procurement committee will endorse at least bidding documents, award of relevant supply contracts, pre- and post-delivery inspection and quality tests, and allocation of CFL consignments to various DISCOs' or KESC's distribution facilities.

Paras 3 and 4, Schedule 5, LA-L2552

35

Covenant LA/FFA Monitoring and Reporting. ADB will field review missions at least semiannually to review implementation and operations of the projects, including resettlement and environmental aspects based on quarterly progress reports to be submitted by the relevant implementing agencies.

Page 5, FFA

A midterm review will be carried out 2 years after the loans are effective, focusing on engineering, financial, resettlement, environmental, and social aspects.

Page 6, FFA

The Borrower shall cause MoWP to establish, within 6 months from the Effective Date, a project performance and monitoring system following the respective design and monitoring frameworks for the projects.

Para 5/7, Schedule 5, LA-L2552/2553

The EA and each IA, any and all other organizations and entities involved in implementing the Project shall comply with, ADB's Anticorruption Policy (1998, as amended) and ADB's policy relating to Enhancing the Asian Development Bank's Role in Combating Money Laundering and the Financing of Terrorism (2003).


L2552. MOWP will submit to ADB quarterly progress reports within 20 days after each quarter.

Page 6, FFA; and Para 7, Schedule 5, LA-L2552 MOWP will submit to ADB annual progress reports within 20 days after each year.

A project completion report will be submitted within 3 months of the completion of the National CFL Project (L2552).

Page 6, FFA

L2553. The Borrower shall cause the PMO to submit to ADB quarterly progress reports within 30 days after each quarter.

Page 6, FFA; and Para 7, Schedule 5, LA-L2553 The Borrower shall cause the PMO to submit to ADB annual progress reports on

the Investment program, including this Project and other ongoing projects, within 30 days after each year. A project completion report will be submitted within 3 months of the completion of the Investment Program Management Support Project (L2553).

Page 6, FFA

ADB = Asian Development Bank, CFL = compact fluorescent lamp, DISCO = distribution company, EA = executing agency, EARF = environmental assessment and review framework, EMP = environmental management plan, FFA = Framework Financing Agreement, GOP = Government of Pakistan, IA = implementing agency, KESC = Karachi Electric Supply Company, LA = Loan Agreement, MFF = multitranche financing facility, MoWP = Ministry of Water and Power, PCP = Planning Commission of Pakistan, PEPCO = Pakistan Electric Power Company (Private) Limited, PMO = Program Management Office

Annex 10: References and Formats A. References

54. The publications below are also available on the ADB website (www.adb.org).

ADB References Covenants in Framework Financing Agreement

General E-Handbook on Project Implementation - www.adb.org/documents/handbooks/project-implementation/

Procurement (see Annex 3) Guidelines on the Use of Consultants by ADB and Its

Borrowers (2010, as amended from time to time) ADB's Consulting Services Operations Manual (2008) ADB's Procurement Guidelines (2010, as amended from time to time) Standard Bidding Documents (Goods; Works; Works-Small; Plant-Design, Supply, Install) Guide on Bid Evaluation Other ADB documents on consulting services www.adb.org/Consulting/documents.asp Other ADB documents on procurement www.adb.org/Procurement/prequalification-bid-documents.asp Project procurement plans www.adb.org/Projects/reports.asp?key=reps&val=PP

Consulting Services (page 5)

Safeguards (see Annex 4) Safeguard Policy Statement (2009) Policy on Gender and Development (2003) More Safety: A Resource Manual for Health and Safety in

Infrastructure (2009)

Schedule 5 (Social Dimensions and Safeguard Requirements) Paras 7-11, Schedule 6 (Undertakings)

Finance/Audit (see Annex 5) Loan Disbursement Handbook (2007) Regulations of the Asian Development Fund (2006) Ordinary Operations Regulations Loan Regulations (2001) Financial Management and Analysis of Projects (2005) Handbook for Borrowers on the Financial Management and

Analysis of Projects (2006) Anticorruption Policy and Integrity: Policies and Strategies (2007)

Disbursements (page 5) Paras 5-6, Schedule 6 (Undertakings) Para 12, Schedule 3 (Implementation Framework)

http://www.adb.org/

http://www.adb.org/documents/handbooks/project-implementation/

http://www.adb.org/Consulting/documents.asp

http://www.adb.org/Procurement/prequalification-bid-documents.asp

http://www.adb.org/Procurement/prequalification-bid-documents.asp

http://www.adb.org/Projects/reports.asp?key=reps&val=PP

37

B. Format of Environmental Monitoring Report

Part I Introduction Construction activities and Project Progress during previous 6 months

Changes in project organization and Environmental management team

Relationships with Contractors, owner, lender, etc.

Part II Environmental Monitoring

Environmental monitoring summary – summarise the previous six months monitoring data and provide explanations of any instances where environmental standards or guidelines are exceeded. Typically this will cover: Noise and Vibration

Water Quality

Air Quality

Flora and fauna monitoring

Recommendations are required to show how any exceedences will be prevented in the future.

Graphs can be used in this section to show trends, however large tables of data or multiple graphs should be attached as an appendix.

Part III Environmental Management EMS, SSEMP and work plans. Report on delivery of documents, required amendments

etc.

Site Inspections and audits – summarise the number and type of site visits

Non-compliance notices – summarise the details on the number of notices given out

and the issues covered. Summarise the ranking of issues.

Corrective action plans - report on timeliness of preparation and completion

Consultation and complaints – report on any consultation undertaken and list any

complaints received.

Annexes Monitoring data

Photographs

Implementation report on EIA/IEE mitigation requirements

Reference Requirement Action to date Action required/comment

38

C. Format of Quarterly Progress Report

I. HIGHLIGHTS

A. Potential Problems

Rating Criteria Flag (Yes/No) Remarks 1. Project implementation delays 2. Poor compliance with covenants 3. Established, staffed, and operating PMU/PIU 4. Fielding of consultants 5. Shortage of counterpart funds/cofinancing 6. Cost overrun 7. Poor compliance audited project accounts and agency financial statements

8. Environmental or social problems 9. Significant disbursement delays

B. Progress Towards Impact and Outcome - assessment of the likelihood that the outcomes will be met - summary of milestones during reporting period - refer to Progress towards Impact and Outcome chart C. Implementation Progress - assessment of the likelihood that project will be completed on time - summary of milestones/design change/s during reporting period - - actual vs projected % physical progress - refer to Progress in Delivering Outputs chart, monitoring of implementation schedule, work breakdown structure - actual vs projected contract and awards and disbursements (totals for the reporting period and cumulative) - refer to Inputs charts (contract awards and withdrawal applications during reporting period, Rune Graph, procurement monitoring sheet, and updated PMO organogram) D. Status of Compliance with Covenants - % complied vs total covenants due for compliance - refer to status of major covenants chart - Summary of safeguards monitoring - refer to safeguards checklists (environment, resettlement, indigenous peoples, gender) E. Requests to ADB – e.g. changes in implementation arrangements/scope, followup of withdrawal applications/approval of procurement documents – refer to chapters in progresss report

II. IMPACT AND OUTCOME

A. Milestone/s

39

B. Problems with Achieving Impact and Outcome

Description Action Taken/Proposed Outstanding Problems

Problems Identified During Reporting Period

C. Progress Towards Impact and Outcome (based on Design and Monitoring Framework)

Design Summary

Performance Targets/Indicators

Progress Assumptions and Risks Assessment of Current Status

Impact

Outcomes

III. IMPLEMENTATION PROGRESS

A. Milestone/s and Design Change/s

B. Problem/s with Implementation Progress

Description Action Taken/Proposed Outstanding Problems

Problems Identified During Reporting Period

C. Progress in Delivering Outputs (based on Design and Monitoring Framework)

Design Summary


Progress Assumptions and Risks Assessment of Current Status

Outputs (Physical)

Outputs (Nonphysical)

D. Monitoring of Project Implementation Schedule with % Weights/Gantt Chart

E. Monitoring of Work Breakdown Structure

Level 1 Level 2 Status 1. 1.1 1.2 2. 2.1

40

F. Status of Inputs

1. Actual and Projected Contracts Awarded During Reporting Period

Description Date of Award Amount Explanation for Any Deviation Projected Actual Projected Actual

2. Actual and Projected Disbursements During Reporting Period

W/A #/ Description Date of Submission to ADB Status Explanation for Any Deviation Projected Actual

G. Summary Actual vs Projected Contract Awards and Disbursements ("Rune Graph")

H. Procurement Monitoring Sheet 1. Goods and Works

3. Consulting Services

I. Updated Organogram (shows planned and engaged experts)

Contract Title Specific Receipt Approval Issue Bid Receipt Bid Bank Contract Receipt PCSS Original

Specification No. Notice Draft Draft of Bid Closing Bid Validity Approval Award Signed Number/ Contract Bank Disbursed

Supplier's Name Date Bid Doc Bid Doc Invitation Date Evaluation Expiration Date Date Contract Date Currency Finance

Method

Procurement PlanAmount (US$)

Advertisem

ent

Contract

Amount

Contract Title Specific EOI Receipt Approval Issuance Proposal Proposal Receipt Approval Receipt Approval Receipt Contract Contract Receipt PCSS Original

Specification No. Notice Closing Submission 1 Submission of RFP/ Closing Validity Submission 2 Submission Submission 3 Submission Submission 4 Approval Award Signed Number/ Contract Bank Disbursed

Supplier's Name Date Date (Shortlisting) 1 Invitation Date Expiration (Tech Evaluation) 2 (Fin Evaluation) 3 (Draft Neg Contract) Date Date Contract Date Currency Finance

Amount (US$) Procurement Plan

Contract

Amount

Adverti

sement

Method

41

IV. COVENANTS

A. Status of Compliance with Major Covenants

Project-Specific Covenants Reference Due Date

Status/Remarks

Economic Environmental Sector Social Others Established, Staffed, and Operating PMU Fielding of Consultants

B. Problems with Complying with Major Covenants

Description Action Taken/Proposed Outstanding Problems Problems Identified During Reporting Period

V. Safeguards Checklists

A. Environment B. Resettlement C. Indigenous Peoples D. Gender

42

D. Suggested Format of Project Completion Report

I. PROJECT DESCRIPTION

A. Objectives B. Components (or subprojects for sector and multiprojects) C. Implementation methods D. Description and justification of changes in components (or subproject appraisal criteria)

or implementation methods

II. PROJECT IMPLEMENTATION A. Compare original and actual implementation schedules. Indicate delays, length and causes of delays, and remedial action taken. B. Compare cost estimates made during appraisal and actual costs (foreign and local). Local currency costs incurred, appropriate exchange rates for their conversion into US dollars, and the foreign exchange costs financed by cofinanciers must be compiled correctly with reference to audited project accounts. Indicate factors that contributed to any significant overruns or underruns. C. State problems or difficulties in recruiting consultants, with reference to ADB procedures. Assess the consultant's work and the working relationship between the executing agency (EA) and the consultant. Use of a design and monitoring framework is strongly recommended. D. State problems or difficulties encountered in procuring goods and services (including civil works) with reference to ADB procedures. Assess the supplier's or contractor's performance under the contract. E. Give the extent of compliance of the borrower and EA with loan covenants, with reasons for noncompliance or delays in compliance and the remedial actions taken. F. State reasons for any delays in loan utilization. Evaluate the appropriateness of the disbursement methods used. Justify the reallocation of loan proceeds. G. State problems or difficulties with subproject appraisal. Evaluate the EA’s performance and capacity to appraise subprojects.

III. INITIAL OPERATIONS A. Describe initial operations of the project and transitional problems encountered from project completion to initial operations. B. Describe measures taken to ensure continued smooth operation of the project relative to management, staffing, funding, and maintenance of project facilities. C. Analyze the prospects of the project benefits being realized.

43

IV. EVALUATION OF THE ASIAN DEVELOPMENT BANK’S PERFORMANCE A. Assess ADB's performance in supervising project implementation. Include comments on the adequacy of the consultants’ terms of reference and appropriateness of specifications in tender documents. Evaluate the effectiveness and timeliness of assistance extended by ADB to solve implementation problems. B. Comment on problems encountered with ADB's procedures. Note the measures taken to resolve these problems and suggest changes in procedures and requirements.

44

Annex 11: Record of Major FAM Changes 55. The first version of the FAM was written by the Fact-finding Mission for the MFF and Tranche 1 (Supplementary Appendix E of the RRP, 1 September 2009). Below are the major updates made to the FAM during MFF implementation.

Date Updated

FAM Section Change Annex

18 Nov 2010 Main Text: Key Persons Involved in the Project, Annex 2. MFF and Project Management, Annex 9. Major Covenants

Changed executing agency for Tranche 1 -Investment Program Management Support Project (Loan 2553) from the Planning Commission of Pakistan to Ministry of Water and Power.

-

24 Oct 2011 Annex 1. MFF and Project Description

Refined design and monitoring frameworks (DMFs)

11-A

21 Sep 2012 Revised DMFs after Loan 2552 extension. 20 Dec 2013 Revised DMFs after second Loan 2552

extension. 23 June 2010 Annex 3-A.

Procurement Plan for Tranche 1

Changed procurement method for the CFL Communication Campaign from “TBD” to “NCB”.

11-B

25 Feb 2011 Increased threshold for Simplified Technical Proposals from less than $600,000 to $750,000.5

11 Apr 2011 Added contract for Implementation Consultants for National CFL Project

27 July 2011 Changed bidding procedure for 10 million CFLs from single-stage, two-envelope to single-stage, one-envelope

30 July 2012 Indicated increase in contract amount for Tranche 2-3 Feasibility Study.

10 Oct 2013 Updated schedules. 28 April 2014 Updated schedules. 11 Apr 2011 Annex 5.B.4.

Allocation of Proceeds, and Annex 6.A.1 Detailed Cost Estimate

Loan 2552: Reallocated $323,400 from Unallocated to new Consulting Services Category.

11-C

22 Mar 2012 Loan 8246: Reallocated $1.346 million from Interest and Commitment Charges to Unallocated.

21 Sep 2012 Annex 5.B.3 Disbursement Arrangements

Revised Loan 2552 extension. -

1 Oct 2012

Annex 6.B. Forecast of Cost to Complete

11-D

1 Oct 2012

Annex 7. Project Execution Plan

11-E

5 This applies to the consulting package for the Feasibility Study for Tranche 2, and any future package up to

$750,000.

45

Date Updated

FAM Section Change Annex

20 Dec 2013 Annex 7. Project Execution Plan

Revised after second Loan 2552 extension. 11-E

25 May 2012 Annex 8.B. Progress Reports, and Annex 9. Major Covenants (Others)

Waived deadline for submission of audited project accounts for FY 2011 (31 Dec 2011)

-

Annex 11-A, Record of FAM Changes

Refined Design and Monitoring Frameworks for the MFF and Tranche 1

46

ANNEX 11-A: REVISED MFF AND PROJECT DESCRIPTION (DESIGN AND MONITORING FRAMEWORKS)

A. Refined Design and Monitoring Frameworks (DMFs)

1. Program (MFF 0031)

Design Summary


Data Sources / Reporting Mechanisms


Impact Improved energy security in Pakistan

4.5 Mtoe (188,406 TJ) of energy saved annually starting 2022

Annual energy statistics

Assumptions Stable macroeconomic conditions Government follows through with policy actions

Risk Escalating security problems that could damage energy assets

Outcome Energy efficiency promoted in Pakistan

CO2 equivalent reduced by at least 5.37 million tons in 2019 Commercial ESCO businesses established and operational by 2019

Annual energy statistics Annual investment statistics

Assumptions Rational energy pricing achieved Efficient equipment and appliances are available in the retail market Industries have continued access to financing and invest in energy efficiency

Risk Low public acceptance and participation

Output Assumption Energy efficient lights and appliances introduced in the market

At least 30 million incandescent bulbs replaced with CFLs by 2014.

Ministry of Water and Power annual reports

The Government is committed to phase out incandescent bulbs by 2012

Risks Low public acceptance due to high cost of energy efficient equipment Non-availability of CFLs in the Pakistan market

Power generation losses (thermal) reduced

At least 700 MW of high efficiency thermal power generation plants replaced or rehabilitated by 2016

Power generating utility reports

Assumptions Power generating utilities are committed to invest on energy efficiency technologies and measures.

Risk Insufficient and expensive imported fuel

Activities with Milestones Energy efficient lights and appliances introduced in the market

Activity Scheduled Start Scheduled Finish Distribution of 30 million CFLs to the residential customers by 2012

Sep 15, 2009 Jul 31, 2012

Inputs OCR - US$ 760,000,000 ADF - US$ 20,000,000 Government - US$ 200,000,000 AFD - US$ 200,000,000

47

Activity Scheduled Start Scheduled Finish Creation of national energy efficiency standards, testing, certification, and labelling regime by 2014

Jan 01, 2013 Dec 31, 2014

Establishment of lamp waste and recycling demonstration facility by 2014

Jul 01, 2012 Mar 31, 2014

Mainstreaming of demand-side management and energy efficiency in residential, commercial and industrial operations by 2016

Dec 01, 2011 Dec 31, 2016


Activity Scheduled Start Scheduled Finish

Design and installation of high efficiency thermal power plants by 2014

Jan 01, 2013 Dec 31, 2014

Commissioning of thermal power plants by 2016

Jan 01, 2015 Dec 31, 2016

Mainstreaming of supply side energy efficiency in power generation, distribution and transmission by 2015

Jul 01, 2012 Dec 31, 2015

2. Project (Loan 2552/2553/8246)

Design

Summary Performance

Targets/Indicators Data Sources/

Reporting MechanismsAssumptions and Risks

Impact Energy efficiency promoted in Pakistan

Electricity peak demand reduced by 1,094 MW by 2015 (baseline: 5000 MW deficit at peak in 2010)

Daily load profiles from PEPCO and DISCOs

Assumptions Industries have continued access to financing and invest in energy efficiency measures. Efficient equipment and appliances are available in the retail market. The Government is committed to phase-out incandescent bulbs by 2012.

Risk Low public acceptance due to high cost of energy efficient equipment.

Outcome Inefficient, substandard incandescent bulbs phased out of the market

At least 30 million incandescent bulbs replaced with CFLs by 2014 Energy savings of at least 1,300 GWh annually starting 2014

Ministry of Water and Power annual reports Annual energy statistics

Assumptions Public procurement guidelines revised to mandate energy efficiency by 2011. Retail distribution chain for CFL and other lighting product functions properly. Customer awareness for proper use and disposal of CFLs is built.

Risk Non-availability of CFL bulbs in Pakistan market

Output CFLs introduced in the local market

30 million CFLs distributed by 2012


Assumptions Customers are willing to replace

48

Design Summary




incandescent bulbs with CFLs for at least 3.5 hours per day. Two thirds of project CFLs are used at the same peak hour (coincidence factor of 0.66) for all CFL light points. Development partners provide support.

Risk CFLs leak into the commercial or other markets.

Increased consumer awareness on energy efficient lighting products

CFL media campaign launched by 2012

Press releases/public advertisements

Assumptions Favorable public reception on energy efficiency programs

Risk Uncooperative media companies

Lamp waste collection and recycling demonstration facility established

Lamp waste facility commissioned by 2014

EPA commissioning certificate

Assumption Proper disposal of incandescent bulbs mandated by 2014

Risk Public resistance to site selection for waste collection and recycling

Energy efficiency and climate change mainstreamed in national development strategy

New accredited appliance and equipment testing facilities established at major regional centers by 2014 Newly-created fully equipped testing and certification laboratories for lighting devices established by 2014

Ministry of Water and Power annual reports Ministry of Water and Power annual reports

Assumptions Ten-year national energy efficiency action plan adopted by 2013 National energy efficiency policy coordination and roadmap management function established in the Planning Commission by 2013 Favorable environment for the establishment of testing and certification laboratories

Risks Limited planning and programming capacities Lack of qualified personnel to operate the testing and certification laboratories

Activities with Milestones CFLs introduced in the local market

Activity Scheduled Start Scheduled Finish Recruitment of project implementation consultants by November 2011

Jun 01, 2011 Nov 30, 2011

Procurement of Contract for Supply of CFLs (Phase 1) by January 2012

Sep 15, 2009 Jan 31, 2012

Inputs OCR - US$ 40,000,000 ADF - US$ 20,000,000 Govt - US$ 25,000,000 AFD - US$ 25,000,000

49

Activity Scheduled Start Scheduled Finish Procurement of Contract for Supply of CFLs (Phase 2) by October 2011

Jul 01, 2011 Oct 31, 2011

Distribution of CFLs (Phase 1) by July 2012

Feb 01, 2012 Jul 31, 2012

Distribution of CFLs (Phase 2) by July 2012

Nov 01, 2011 Jul 31, 2012


Activity Scheduled Start Scheduled Finish Procurement of contract for CFL media campaign

Jun 01, 2010 Oct 31, 2011

Implementation of CFL media campaign

Nov 01, 2011 Jul 31, 2012


Activity Scheduled Start Scheduled Finish Procurement of turnkey contract for lamp waste management facility by December 2012

Jul 01, 2012 Dec 31, 2012

Completion of lamp waste management facility by December 2013

Jan 01, 2013 Dec 31, 2013

Testing and commissioning of lamp waste management facility by March 2014

Jan 01, 2014 Mar 31, 2014


Activity Scheduled Start Scheduled Finish Recruitment of consultants to manage the Investment Program by June 2012

Dec 01, 2011 Jun 30, 2012

Management of Investment Program during Tranche 2 from July 2012 to June 2014

Jul 01, 2012 Jun 30, 2014

Recruitment of consultants for institutional strengthening and capacity building by December 2012

Jul 01, 2012 Dec 31, 2012

Institutional strengthening and capacity building

Jan 01, 2013 Dec 31, 2013

Creation of national energy efficiency standards, testing certification and labelling regime by 2014

Jan 01, 2013 Dec 31, 2014

Establishment of appliance and equipment testing facilities at major regional centers by December 2014

Jun 01, 2013 Dec 31, 2014

Establishment of testing and certification laboratories for lighting devices by December 2014

Jun 01, 2013 Dec 31, 2014

50

B. Revised DMFs after Loan 2552 Extension

1. Program (MFF 0031)

Design Summary







Assumptions Stable macroeconomic conditions Government follows through with policy actions





Assumptions Rational energy pricing achieved Efficient equipment and appliances are available in the retail market Industries have continued access to financing and invest in energy efficiency

Risk

Low public acceptance and participation

Outputs Energy efficient lights and appliances introduced in the market

At least 30 million incandescent bulbs replaced with CFLs by 2014


Assumptions The Government is committed to phase out incandescent bulbs by 2012

Risks Low public acceptance due to high

cost of energy efficient equipment Non-availability of CFLs in the Pakistan market

Power generation losses reduced



Assumptions Power generating utilities are committed to invest on energy efficiency technologies and measures.

Risk

Insufficient and expensive imported fuel.



Aug 1, 2012 Dec 31, 2013


51

Activity Scheduled Start Scheduled Finish Creation of national energy efficiency standards, testing, certification, and labelling regime by 2014

Jan 01, 2013 Dec 31, 2014


May 1, 2013 Mar 31, 2014


Aug 1, 2012 Dec 31, 2016


Activity Scheduled Start Scheduled Finish Design and installation of high efficiency thermal power plants by 2014

Jan 01, 2013 Dec 31, 2014


Jan 01, 2015 Dec 31, 2016

Mainstreaming of supply side energy efficiency in power generation, distribution and transmission by 2015

Jan 1, 2013 Dec 31, 2015

2. Project (Loan 2552/2553/8246)







Assumptions Industries have continued access to financing and invest in energy efficiency measures. Efficient equipment and appliances are available in the retail market. The Government is committed to phase-out incandescent bulbs by 2012.

Risk Low public acceptance due to high cost of energy efficient equipment.




Assumptions Public procurement guidelines revised to mandate energy efficiency by 2011. Retail distribution chain for CFL and other lighting product functions properly.

52




Customer awareness for proper use and disposal of CFLs is built.


Outputs CFLs introduced in the local market



Assumptions Customers are willing to replace incandescent bulbs with CFLs for at least 3.5 hours per day. Two thirds of project CFLs are used at the same peak hour (coincidence factor of 0.66) for all CFL light points. Development partners provide support.





Assumption Favorable public reception on energy efficiency programs Risk Uncooperative media companies




Assumption Proper disposal of incandescent bulbs mandated by2014 Risk Public resistance to site selection for waste collection and recycling.


New accredited appliance and equipment testing facilities established at major regional centers by 2014


Assumptions Ten-year national energy efficiency action plan adopted by 2013 National energy efficiency policy coordination and

53




Newly-created fully equipped testing and certification laboratories for lighting devices established by 2014


roadmap management function established in the Planning Commission by 2013 Favorable environment for the establishment of testing and certification laboratories

Risks Limited planning and

programming capacities Lack of qualified personnel to operate the testing and certification laboratories

Activities with Milestones CFLs introduced in the local market

Activity Scheduled Start Scheduled Finish Recruitment of project implementation consultants by July 2012

Jun 01, 2011 Jul 31, 2012

Procurement of Contract for Supply of CFLs (Phase 1) by July 2012

Sep 15, 2009 Jul 31, 2012


Jul 01, 2011 Jul 31, 2012

Distribution of CFLs (Phase 1) by December 2013

Aug 01, 2012 Dec 31, 2013

Distribution of CFLs (Phase 2) by December 2013

Aug 01, 2012 Dec 31, 2013



Jun 01, 2010 Dec 31, 2011

Implementation of CFL media campaign Sep 1, 2012 Sep 30, 2013


Activity Scheduled Start Scheduled Finish Procurement of turnkey contract for lamp waste management facility by April 2013

Oct 01, 2012 April 30, 2013

Completion of lamp waste management facility by April 2014

May 01, 2013 April 30, 2014

Testing and commissioning of lamp waste management facility by July 2014

May 01, 2014 July 31, 2014



Nov 1, 2012 Jun 30, 2013

Inputs OCR - US$ 40,000,000 ADF - US$ 20,000,000 Govt – US$25,000,000 AFD - US$ 25,000,000

54

Activity Scheduled Start Scheduled Finish Management of Investment Program during Tranche 2 from Jan 2013 to December 2015

Jan 01, 2013 December 31, 2015

Recruitment of consultants for institutional strengthening and capacity building by November 2013

April 01, 2013 Nov 30, 2013


Jan 01, 2014 Dec 31, 2015

Creation of national energy efficiency standards, testing, certification and labeling regime by 2014

Jan 01, 2013 Dec 31, 2014


Jun 01, 2013 Dec 31, 2014


Jun 01, 2013 Dec 31, 2014

C. Revised DMFs after Second Loan 2552 Extension 1. Program (MFF 0031)

Design Summary Performance Targets / Indicators






Assumptions Stable macroeconomic

conditions Government follows through with policy actions





Assumptions Rational energy pricing

achieved Efficient equipment and appliances are available in the retail market Industries have continued access to financing and invest in energy efficiency

Risk Low public acceptance and participation

55




Outputs Energy efficient lights and appliances introduced in the market

At least 30 million incandescent bulbs replaced with CFLs by 2014


Assumption The Government is committed to phase out incandescent bulbs by 2012 Risks Low public acceptance

due to high cost of energy efficient equipment Non-availability of CFLs in the Pakistan market

Power generation losses reduced



Assumptions Power generating utilities are committed to invest on energy efficiency technologies and measures. Risk Insufficient and expensive imported fuel



Jan 1, 2014 June 30, 2014

Creation of national energy efficiency standards, testing, certification, and labelling regime by 2014

Jan 01, 2013 Dec 31, 2014


May 1, 2013 Mar 31, 2014


Aug 1, 2012 Dec 31, 2016

Power generation losses (thermal) reduced Activity Scheduled Start Scheduled Finish Design and installation of high efficiency thermal power plants by 2014

Jan 01, 2013 Dec 31, 2014


Jan 01, 2015 Dec 31, 2016

Mainstreaming of supply side energy efficiency in

Jan 1, 2013 Dec 31, 2015


56




power generation, distribution and transmission by 2015

2. Project (Loan 2552/2553/8246)







Assumptions Industries have

continued access to financing and invest in energy efficiency measures. Efficient equipment and appliances are available in the retail market. The Government is committed to phase-out incandescent bulbs by 2012.

Risk Low public acceptance due to high cost of energy efficient equipment




Assumptions Public procurement

guidelines revised to mandate energy efficiency by 2011. Retail distribution chain for CFL and other lighting product functions properly. Customer awareness for proper use and disposal of CFLs is built.


Outputs CFLs introduced in the local market



Assumptions Customers are willing to replace incandescent bulbs with CFLs for at least 3.5 hours per day. Two thirds of project CFLs are used at the

57




same peak hour (coincidence factor of 0.66) for all CFL light points. Development partners provide support.





Assumptions Favorable public reception on energy efficiency programs Risk Uncooperative media companies




Assumption Proper disposal of incandescent bulbs mandated by 2014 Risk Public resistance to site selection for waste collection and recycling.


New accredited appliance and equipment testing facilities established at major regional centers by 2014 Newly-created fully equipped testing and certification laboratories for lighting devices established by 2014

Ministry of Water and Power annual reports Ministry of Water and Power annual reports

Assumptions Ten-year national energy efficiency action plan adopted by 2013 National energy efficiency policy coordination and roadmap management function established in the Planning Commission by 2013 Favorable environment for the establishment of testing and certification laboratories

Risks Limited planning and

programming capacities Lack of qualified personnel to operate the testing and certification laboratories

58

Activities with Milestones

CFLs introduced in the local market

Activity Scheduled Start Scheduled Finish Recruitment of project implementation consultants by August 2012

Jun 01, 2011 Aug 31, 2012


Sep 15, 2009 Jul 31, 2012


Feb 01, 2011 June 30, 2012

Distribution of CFLs (Phase 1) by December June 2014

Jan 01, 2014 June 30, 2014

Distribution of CFLs (Phase 2) by December June 2014

Jan 01, 2014 June 30, 2014



Jun 01, 2010 Dec 31, 2011

Implementation of CFL media campaign Dec 1, 2013 June 30, 2014


Activity Scheduled Start Scheduled Finish Procurement of turnkey contract for lamp waste management facility by April 2013

Oct 01, 2012 April 30, 2013

Completion of lamp waste management facility by April 2014

May 01, 2013 April 30, 2014

Testing and commissioning of lamp waste management facility by July 2014

May 01, 2014 July 31, 2014



Nov 1, 2012 Jun 30, 2013

Management of Investment Program during Tranche 2 from Jan 2013 to December 2015

Jan 01, 2013 Dec 31, 2015

Recruitment of consultants for institutional strengthening and capacity building by November 2013

April 01, 2013 Nov 30, 2013


Jan 01, 2014 Dec 31, 2015

Creation of national energy efficiency standards, testing, certification and labeling regime by 2014

Jan 01, 2013 Dec 31, 2014


Jun 01, 2013 Dec 31, 2014


Jun 01, 2013 Dec 31, 2014

Inputs OCR - US$ 40,000,000 ADF - US$ 20,000,000 Government – US$ 25,000,000 AFD - US$ 25,000,000

Annex 11-B, Record of FAM Changes

Updated Procurement Plan for Tranche 1

59

ANNEX 11-B: UPDATED PROCUREMENT PLANS FOR TRANCHE 1

A. As of October 2013

Project Name: Energy Efficiency Investment Program, Tranche 1

Country: Pakistan Executing Agency: Ministry of Water and Power

Loan Amounts: OCR: $40 million, ADF: $20 million, AFD: $25 million equivalent

Loan Numbers: 2552/2553/8246

Date of First Procurement Plan: 13 August 2009 Date of this Procurement Plan: 10 October 2013

A. Process Thresholds, Review, and 18-Month Procurement Plan

1. Project Procurement Thresholds

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works Method Threshold

International Competitive Bidding (works) At least $5,000,000

International Competitive Bidding (goods) At least $1,000,000

National Competitive Bidding (works) Less than $5,000,000

National Competitive Bidding (goods) Less than $1,000,000

Shopping Less than $100,000

2. ADB Prior or Post Review

2. Except as ADB may otherwise agree, the following prior- or post-review requirements apply to the various procurement and consultant recruitment methods used for the project. Procurement Method Prior or Post Comments Procurement of Goods and Works International Competitive Bidding (ICB) Works/Goods Prior National Competitive Bidding (NCB) Works/Goods Prior The first NCB contract is

subject to prior review by ADB

Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior Full Technical Proposal:

Above $750,000

Simplified Technical Proposal: $200,000 to $750,000

Other selection methods: Consultants Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget Selection (FBS), and Single-Source Selection (SSS)

Prior Biodata Technical Proposal

Recruitment of Individual Consultants Individual Consultants Prior

60

B. Goods and Works Contracts Estimated to Cost More Than $1 Million

3. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Funding Source

General Description

Contract Value

Procurement Method

Prequalification of Bidders (y/n)

Advertisement Date (quarter/year)

Comments

ADF Design, supply, and install for waste management facility

a

$2.0 million

ICB Turnkey No Q4 2012Q1 2014 Single-stage, single envelope turnkey method

a Recycling and disposal for all used fluorescent lamps.

ADF = Asian Development Fund, ICB = international competitive bidding.

C. Consulting Services Contracts Estimated to Cost More Than $100,000

4. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Funding Source

General Description Contract Value

Recruitment Method

1

Advertisement Date

(quarter/year)

International or National Assignment

Comments

ADF Management of Investment Program

$1.6 million QCBS (quality: cost ratio, 80:20)


FTP

ADF Feasibility studies/ preparation for subsequent tranche


Q4 2012TBD

International and national

FTP/STP

ADF Project monitoring and evaluation for tranche 1

$1.0 million

QCBS (quality: cost ratio, 80:20)

Q4 2012Q1 2014 International and national

FTP

ADF Post-PDD CDM requirements


Q1 2013Q1 2014 International and national

FTP

ADF Institutional strengthening and capacity building

$2.0 million

TBD TBDQ1 2014 TBD

ADF = Asian Development Fund, FTP = full technical proposal, PDD CDM = project design document clean development mechanism, QCBS = quality- and cost-based selection, STP = simplified technical proposal, TBD = to be determined.

D. Goods and Works Contracts Estimated to Cost Less Than $1 Million and Consulting Services Contracts Less Than $100,000

5. The following table groups smaller-value goods, works, and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Funding Source

General Description

Value of Contracts

(cumulative)

Number of Contracts

Procurement / Recruitment

Method1

Comments

ADF Operations Vehicles $200,000 2 Shopping ADF Furniture and Office Equipment $100,000 Various Shopping ADF Tools and Maintenance Equipment

$100,000 Various Shopping

ADF = Asian Development Fund.

61

E. Indicative List of Packages Required Under the Project

6. The following table provides an indicative list of all procurement (goods, works, and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

General Description Estimated/

Actual Value (cumulative)

Estimated/ Actual Number

of Contracts

Procurement Method

Domestic Preference Applicable

Comments

1. Goods a. CFLs (2 packages) $56.0 million 2 ICB Yes Contracts for Package 1

($16 million) signed in Q3 2012, and for Package 2 (PKR 2.8 billion) in Q2 2012.

b. Operations Vehicles

$200,000 2 Shopping No

c. Furniture and office equipment

$100,000 various Shopping No

d. Tools and maintenance equipment

$100,000 various Shopping No

e. Design and implementation of CFL media campaign

$2.21 million 1 NCB No Contract awarded in Q4 2011 (2 lots).

2. Turnkey Design, supply, and install for lamp waste management facility

$2.0.0 million 1 ICB turnkey

3. Consulting Services a. Management of Investment Program


FTP

b. Feasibility studies/ preparation for subsequent tranche

$2.0 million

various

QCBS (international)

FTP/STP

Contract awarded for Tranche 2 feasibility study ($1,357,174) in Q2 2012.

c. Project monitoring and evaluation for tranche 1


FTP

d. Post-PDD CDM requirements

$1.2 million 1 QCBS FTP

e. Institutional strengthening and capacity building

$2.0 million TBD

TBD

TBD

f. Project implementation consultants

$323,400 3 Individual consultant No 3 contracts signed in Q2/Q3 2012.

CFL = compact fluorescent lamp, ICB = international competitive bidding, FTP = full technical proposal, NCB = national competitive bidding, QCBS = quality- and cost-based selection, PDD CDM = project design document clean development mechanism, STP = simplified technical proposal, TBD = to be determined. Source: Asian Development Bank estimates.

62

B. As of April 2014

Basic Data

Project Name: Energy Efficiency Investment Program - Tranche 1 Project Number: 42051-023 Approval Number: 2553/2552/8246 Country: Pakistan Executing Agency: Ministry of Water and Power

Project Financing Amount: Loan: US$ 60,000,000; Cofinancing: US$ 25,000,000 ADB Financing: US$ 85,000,000 Non-ADB Financing:

Implementing Agency: Faisalabad Electric Supply Company Limited, GENCO Holding Company Limited, Gujranwala Electric Power Company, Hyderabad Electric Supply Company, Islamabad Electric Supply Company, Karachi Electric Supply Corp., Lahore Electric Supply Company, Multan Electric Power Company, Peshawar electric Supply Company, Quetta Electric Supply Company

Date of First Procurement Plan: 30 September 2009 Date of this Procurement Plan: 28 April 2014

A. Methods, Thresholds, Review and 18-Month Procurement Plan

1. Procurement and Consulting Methods and Thresholds

Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works Method Threshold Comments

International Competitive Bidding for Goods US$ 1,000,000 and Above National Competitive Bidding for Goods Between US$ 100,000 and US$ 999,999 The first NCB is subject to prior

review, thereafter post review. Shopping for Goods Up to US$ 99,999 International Competitive Bidding for Works US$ 5,000,000 and Above National Competitive Bidding for Works Between US$ 100,000 and US$ 4,999,999 The first NCB is subject to prior

review, thereafter post review. Shopping for Works Up to US$ 99,999

Consulting Services Method Comments

Consultant's Qualification Selection for Consulting Firm Biodata Technical Proposal Fixed Budget Selection for Consulting Firm Biodata Technical Proposal Least-Cost Selection for Consulting Firm Biodata Technical Proposal Quality- and Cost-Based Selection for Consulting Firm Full Technical Proposal: At least $600,000; Simplified Technical

Proposal: Less than $600,000 but at least $200,000 Single Source Selection for Consulting Firm Biodata Technical Proposal Individual Consultants Selection for Individual Consultant

2. Goods and Works Contracts Estimated to Cost $1 Million or More

The following table lists goods and works contracts for which the procurement activity is either ongoing or expected to commence within the next 18 months.

63

Package Number

General Description

Estimated Value

Procurement Method

Review (Prior/Post)

Bidding Procedure

Advertisement (quarter/year) Comments

11 Design, supply, and install for waste management facility

2,000,000.00

ICB PRIOR 1S1E Q1 / 2014 Prequalification of Bidders: N Domestic Preference Applicable: N Bidding Document: Plant

3. Consulting Services Contracts Estimated to Cost $100,000 or More

The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected to commence within the next 18 months.

Package Number

General Description

Estimated Value

Recruitment Method

Review (Prior/Post)

Advertisement Date (quarter/year)

Type of Proposal Comments

10 Institutional strengthening and capacity building

2,000,000 QCBS PRIOR Q3 / 2014 FTP

Assignment: International Quality-Cost Ratio: 80:20

12 Management of investment program

1,600,000 QCBS PRIOR Q3 / 2014 FTP Assignment: International Quality-Cost Ratio: 80:20

13 Post-PDD CDM requirements

1,200,000 QCBS PRIOR Q1 / 2015 FTP


9 Project monitoring and evaluation for Tranche 1

1,000,000 QCBS PRIOR Q3 / 2014 FTP


4. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)

The following table groups smaller-value goods, works and consulting services contracts for which the activity is either ongoing or expected to commence within the next 18 months.

Package Number

General Description

Estimated Value

Number of Contracts

Procurement Method

Review (Prior/Post)

Advertisement (quarter/year) Comments

6 Operations vehicles 200,000 2 SHOPPING POST Q2 / 2014 Prequalification of Bidders: N 7 Furniture and office

equipment 100,000 3 SHOPPING POST Q2 / 2014 Prequalification of Bidders: N

Comments: multiple contracts 8 Tools and maintenance

equipment 100,000 3 SHOPPING POST Q2 / 2014 Prequalification of Bidders: N

Comments: multiple contracts

Consulting Services Package Number

General Description

Estimated Value

Number of Contracts

Recruitment Method

Review (Prior/Post)

Advertisement (quarter/year)

Type of Proposal Comments

None B. Indicative List of Packages Required Under the Project

The following table provides an indicative list of goods, works and consulting services contracts over the life of the project, other than those mentioned in previous sections (i.e., those expected beyond the current period).

Goods and Works

Package Number General Description

Estimated Value

(cumulative) Estimated Number

of Contracts Procurement

Method Review

(Prior/Post) Bidding

Procedure Comments

None

64

Consulting Services

Package Number General Description

Estimated Value

(cumulative) Estimated Number

of Contracts Recruitment

Method Review

(Prior/Post) Type of

Proposal Comments

None

C. Ongoing Contracts

Goods and Works Package Number

General Description

Estimated Value

Contract Value

Procurement Method


ADB Approval of Contract

Award Comments

1 Design and implementation of CFL media campaign

$2,500,000 $2,214,925 NCB Q1 / 2011 9 Sep 2011 Contract amount: PKR 199,376,434

3 Supply of 10 million CFLs

$37,000,000 $29,645,315 ICB Q2 / 2011 21 March 2012 Contract amount: PKR 2.8 billion

4 Supply of 20 million CFLs

$19,000,000 $16,000,000 ICB Q4 / 2009

18 Jan 2012

Consulting Services Package Number

General Description

Estimated Value

Contract Value

Recruitment Method


ADB Approval of Contract

Award Comments

5 Project implementation consultants

$323,400 $323,400 ICS Q2–Q3 2011 2 February 2012

3 contracts for 1 international and 2 national experts. Contracts signed in July and August 2012.

Annex 11-C, Record of PAM Changes

Reallocation of Loan Proceeds and Revised Detailed Cost Estimates Under Tranche 1 (Loan 2552/8246)

65

ANNEX 11-C: REALLOCATION OF LOAN PROCEEDS UNDER TRANCHE 1 (LOAN 2552/8246)

A. Allocation of Proceeds

Item Loan 2552 (OCR) Loan 8246 (AFD)

Amount Allocated ($)


Amount

Allocated ($)a


Goods (CFL) 34,462,000 62% of total expenditure

21,538,000 38% of total expenditure Communication

Campaign 1,538,000 962,000

Interest and Commitment Charges


1,346,0000 38% of amount due

Unallocated 1,846,0001,522,600

1,154,0002,536,799

Consulting Services 323,400 100% of total expenditure

Total 40,000,000 25,000,000 a

approved allocation is in euros, totalling €20 million equivalent

B. Detailed Cost Estimate

Item Total ADB % AFD % Gov't %

A. Investment Costs

1. Goodsa 56,000 34,462 62 21,538 38 0 0

2. Lamp Distribution 20,000 0 0 0 0 20,000 100

3. Communication Campaign 2,500 1,538 62 962 38 0 0

4. Project Implementationb 323 323 100 0 0 0 0

Subtotal (A) 78,500823

36,000 22,500 20,000

B. Contingencies

1. Physical 2,5602 1,1,575 62 985 38 0 0 2. Price 440 271 62 169 38 0 0

3. Unallocatedc 1,346 0 1,346 0

Subtotal (B) 3,0002,677

1,846523

1,1542,500

0

Total before Financing Charge A+B 81,500 37,846 23,6545,000

20,000

C. Financing Charges

1. Interest during implementation 3,400 2,054 10062

1,3460 380 0 0

2. Commitment charges 100 100 100 0 0 0 0

Subtotal (C) 3,500 2,154 1,3460 0

Total 85,000 40,000 47 25,000 29 20,000 24

ADB = Asian Development Bank, AFD = Agence Française de Développement, CFL = compact fluorescent lamp, Gov’t = Government of Pakistan. Notes:

1. In mid-2009 prices. 2. Contingencies at 5% with price contingencies based on local inflation of 6% and foreign inflation of 0.7% 3. Interest during construction based on 10-year swap on US$ at 3.8% and spread of 20 basis points. 4. Commitment charges are 0.15%. 5. Relevant financing charges will be financed by each funding source.

a CFLs are exempt from customs duty and sales tax.

.b Reallocated from Physical Contingencies in April 2011.

c Reallocated from Interest During Implementation in March 2012.


Annex 11-DD, Record of PAM Changes

Refined Design and Monitoring Frameworks for the MFF and Tranche 1Revised Forecast of Cost to Complete

66

ANNEX 11-D: REVISED FORECASTS OF COST TO COMPLETE

A. Loan 2552

B. Loan 8246

C. Loan 2553

Annex 11-DE, Record of PAM Changes

Refined Design and Monitoring Frameworks for the MFF and Tranche 1Revised Project Execution Plan

67

ANNEX 11-E: REVISED PROJECT EXECUTION PLAN

A. National CFL Project (Tranche 1) after Extension of Loan 2552

Key requisite actions:

1. Pre-shipment inspection for 3rd consignment of CFLs to immediately follow the pre-shipment inspection for the 2nd consignment, by 30 September 2013.

2. CFL media campaign to be launched by 1 October 2013, to enable CFL distribution to commence.

3. To process disbursements for ADB financing, in-land delivery of CFLs to warehouses to be completed by 31 December 2013.

3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Signing of CFL supply contracts

Type testing & approval of CFL prototypes

Pre-shipment inspection, and shipment of 1st CFL consignment to Karachi

port

Clearance at Karachi port, and in-land delivery of CFLs to warehouses

First phase of CFL distribution to households

Pre-shipment inspection, and shipment of 2nd CFL consignment to Karachi

port


Second phase of CFL distribution to households

Pre-shipment inspection, and shipment of 3rd CFL consignment to Karachi

port


Third phase of CFL distribution to households

CFL media campaign - execution

Mobilization of project implementation consultants (intermittent inputs)

2013

June Jan Feb Mar

2014

July Aug Sep Oct NovMay JuneMilestone April MayMar

2012

Dec Jan Feb Mar AprilJune July Aug Sep Oct Nov Dec

68

B. National CFL Project (Tranche 1) after Second Extension of Loan 2552

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Signing of CFL supply contracts

Type testing & approval of CFL prototypes

Pre-shipment inspection, and shipment of 1st CFL consignment to Karachi port


First phase of CFL distribution to households

Pre-shipment inspection, and shipment of 2nd CFL consignment to Karachi port


Second phase of CFL distribution to households

Pre-shipment inspection, and shipment of 3rd CFL consignment to Karachi port


Third phase of CFL distribution to households

CFL media campaign - execution

Mobilization of project implementation consultants (intermittent inputs)

April May June

20142012

Dec

2013

June Jan Feb MarJuly Aug Sep Oct NovMay JuneJan Feb Mar AprilJune July Aug Sep Oct Nov DecApril MayMilestone